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NZ Jeremy

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  • Rally In The Shipping Sector - Is It Time To Invest In Bulk Shipping? [View article]
    Hi Ramisle,

    Did you read the Economist article talking about the hundreds of billions of dollars of new eco regulations flying at the shipping industry in 2015 from the IMO?

    I think it explains (in part) the mental (at face value) expansion in bulkers we've seen.

    2015 may be the turn around year but not because of market forces but rather government (UN) regs.
    Apr 8 04:27 AM | Likes Like |Link to Comment
  • Have We Seen The Bottom In The Dry Bulk Industry? [View article]
    Thanks, the Clarksons website has a searchable database that lays the results out in tables.
    Dec 11 01:52 PM | Likes Like |Link to Comment
  • Have We Seen The Bottom In The Dry Bulk Industry? [View article]
    Thanks for that info. The shipbroking reports seem the best way to get a handle on values, can find a table as yet...
    Dec 10 03:45 PM | Likes Like |Link to Comment
  • Have We Seen The Bottom In The Dry Bulk Industry? [View article]
    Do you know of any site (paid or unpaid) that provides tables of bulkers at approx. market values, size vs year built?

    It would help no end for accurately valuing fleets.
    Dec 9 08:30 PM | Likes Like |Link to Comment
  • Have We Seen The Bottom In The Dry Bulk Industry? [View article]
    I think the probabilty of it taking 10 years for the industry to reach the "bottom" is slim, maybe 5-10%, short of something unusual like a Suez closure or global depression.

    Governments have been subsidising shipyards for decades to aid (or keep) industrial development, it doesn't matter if orders aren't placed (unless yards finance their own hulls and add to the glut at a loss).

    A move to bareboats is a continuation of the existing trend, started with the oil majors in the 50s which lead to the Worldscale in the 60s.

    I think the equation is relatively simple, although I could be missing something, currently:

    Supply>Demand

    To predict the "bottom" in rates you need to factor in the following and predict when Supply</>Demand:

    Current Supply (+New Build dwt - Scrapped dwt) x time </> Current Demand (+%increase in international commodity trade x 3-5) x time

    If you look at the FFA market most people in the industry are doing this calculation and predicting 2015 as the first year with an appreciable rise in rates, give it a 60% probability.
    Dec 6 03:14 PM | Likes Like |Link to Comment
  • Have We Seen The Bottom In The Dry Bulk Industry? [View article]
    The first point is from an ICS textbook, you're in the industry, I assume, and surely can tell me how reliable they are? In my first gig.

    Exactly, all I see is carnage.

    Your right on the second point, I was reguitating a comment made on another shipping blog (which I now cannot find) and presume I've remembered the years wrong.

    On the third point, the point I was making is that there is massive capacity in the shipbuilding industry and presumably they'll be offering some attractive rates on newbuilds as they get more desperate. Some owners will be tempted, hardly good news. There are 1700 odd confrimed orders till 2015 and the FFAs say 2015 is the turn around, so baring a full Euro collapse, China tanking or a global recession, I'd put my money on late 2014/early 2015 being the "bottom", so to answer your question, "Why exactly do you want to invest in a sector that is in such dire straits as to resort to these sacrifices", I don't, never said I did, at least not till late 2014 and even then DSX seems the only reliable, efficiently run lot who and knows what shape they'll be in then.

    I know about the antics of the CEOs Dryships and Paragon, et al.

    Seems to me the play is to wait till mid 2014 and survey the landscape at that point.
    Dec 4 10:57 PM | Likes Like |Link to Comment
  • Overseas Shipholding Group Inc. - Why The Equity Is Worthless, Part II [View article]
    Whoops, I've obvously had a brain melt there on the FFAs math, my point is the derivative and construction liabilities need a bit of clarification before there can be listed as liabilities.

    Is this covered off in the explan. notes?
    Dec 4 04:45 PM | Likes Like |Link to Comment
  • Have We Seen The Bottom In The Dry Bulk Industry? [View article]
    Important points to remember:

    - A 1% growth in international trade in a commodity equals a 3% - 5% in the number of ton-miles required, when people examine the trade in commodities that underpins BDI rates they often overlook this.
    - Shipowners will scrap ship as early as 15 years if they feel they must and can get a good price.
    - Shipyards still have a large amount of contraction to go, about 100 in China is estimated as sustainable, there are currently 400
    - Shipowners won't endless operate ships if they are losing money, if they can lose less by anchoring a ship and running a skelton crew, or even declassifying a vessel they will.
    Dec 4 04:45 PM | Likes Like |Link to Comment
  • Overseas Shipholding Group Inc. - Why The Equity Is Worthless, Part II [View article]
    It would take a Suez closure to save OSG and even then......

    A quick question to Infitialis: why do the construction contracts and derivative contracts liabilties not also have potential assets listed?

    If the construction contract is with a shipyard (as I assume it is) in a rising market it can be onsold at profit, for example Golar LNG sold multiple contracts it had initiated pre-2008 at very healthy margins. Not that kind of market today and it certainly matters when OSG signed the contracts but at the very least new building contracts can recover some of the liability. The only time they would be a dead loss is contractual obligation payments for cancelled contracts.

    Similarly there should be something recoverable from any FFAs enetred into, even if OSG bet on the market going the wrong way, for example if they enter into an FFA at $8,000 USD p/day and the market went to $10,000 USD, the contract can still recover .80c on the $1 (give or take).

    Disclosure: no position
    Dec 4 05:05 AM | Likes Like |Link to Comment
  • Golden Ocean Sees A Silver Lining [View article]
    Charterers prefer 1 x Cape over 2 x Panamaxes - if the loading/discharge ports can handle them. Port efficiency is a big problem.
    Dec 2 01:42 AM | Likes Like |Link to Comment
  • Dryships: Looks Fairly Attractive With Major Risks Attached [View article]
    What the market is basically saying is DRYS would be better off to send every last vessel to Alang and buy more ORIG shares.

    GE is betting on the BDI recovering soon.
    Nov 27 04:15 PM | Likes Like |Link to Comment
  • Textainer Group Holdings Vs. TAL International Group [View article]
    I had a quick look at the balance sheet of their main competitors and this seems pretty standard for the industry, I guess it's why they get good ROE but poor ROA and ROI...
    Nov 25 11:37 PM | Likes Like |Link to Comment
  • Textainer Group Holdings Vs. TAL International Group [View article]
    The debt of TGH looks high?
    Nov 21 05:02 PM | Likes Like |Link to Comment
  • Diana Shipping Will Benefit From Shipping Market Chaos [View article]
    DSX is a Greek shipping company, the only thing they hate more than debt covenants is tax. The money will be held offshore.
    Nov 20 05:22 AM | Likes Like |Link to Comment
  • This Might Be Why People Are So Nervous To Lend To OSG [View instapost]
    If there are two things that send a shudder up my spine when talking about the shipping industry it's covenants and taxes.

    Why shipping lenders bother with covenants is beyond me, if your borrower is breaching them it's likely that you stuffed up as the lender or the second hand vessel market is depressed. Never a good time to foreclose.
    Oct 18 06:22 PM | Likes Like |Link to Comment
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