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Moolah
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Posting #1: Fri Jun 13th, 2008 05:16 |
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Drybulk index posts largest-ever 1 day drop
Key drybulk index posts largest-ever 1 day drop as demand sinks for largest drybulk vessels
June 12, 2008: 03:03 PM EST
NEW YORK (Associated Press) - A key shipping index measuring drybulk vessel activity posted its largest one-day drop Thursday, dragged down as rates for the sector's biggest ships lost significant ground.
The Baltic Dry Index, which measures drybulk shipping rates on 40 routes across the world, sank 963 points Thursday to reach 10,142. The index had wavered, but remained above 11,000, since hitting an all-time high on May 20 of 11,793. The index, managed by the Baltic Exchange in London, had previously posted its biggest one-day skid of 443 points on Jan. 17.
The index's reading for Capesize vessels _ the largest drybulk carriers _ fell 16 percent. The average Capesize vessel now costs about $180,000 per day, compared with prices of more than $230,000 per day last week. Capesize vessels are so named because they are too big to fit through the Suez or Panama canals, and must instead sail around the Cape of Good Hope or Cape Horn to travel between oceans.
Cantor Fitzgerald analyst Natasha Boyden said in an interview the significant drop was the result of Chinese iron ore importers working through their stock piles of the commodity instead of bringing more into the country. With the huge demand for iron ore, steel and other commodities carried by drybulk ships soaring, Boyden said Chinese importers turned to their own supplies as ports clogged and drybulk rates skyrocketed.
But Fitzgerald noted that the Chinese only have about three to four weeks worth of iron ore stockpiled. After its resources are used up, Boyden said drybulk ships will again be in high demand to deliver goods to the country.
"This (pull back) is merely temporary," she said. "Painful, but temporary."
JPMorgan analyst Jonathan Chappell said in a client note that he expects the Baltic Dry Index to continue to fall through the third quarter, as the typically slow period will be compounded by an expected lull in trading around the Beijing Olympics and further draw downs of existing inventory by Chinese steelmakers.
Although drybulk's decline should not be as significant as the slip seen from November to January, Chappell suggests that investors hold off until a buying opportunity emerges in the fourth quarter.
In afternoon trading, shares of DryShips Inc. fell $6.44, or 8.3 percent, to $71. Navios Maritime Inc. lost 27 cents, or 2.8 percent, to $9.52, while Danaos Corp. gave up 70 cents, or 3 percent, to $22.83.
Genco Shipping and Trading Ltd. sank $4.51, or 7.9 percent, to $52.85. Diana Shipping Inc. pulled back $1.17, or 3.9 percent, to $29.
Excel Maritime Carriers Ltd. retreated $4.21, or 10.3 percent, to $36.60, and Eagle Bulk Shipping Inc. slipped $2.32, or 8.1 percent, to $26.21.
Euroseas Ltd. fell 27 cents, or 2.1 percent, to $12.92
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MooFassa
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Posting #2: Sat Jun 14th, 2008 02:32 |
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Baltic Dry index fall hits shipping cos
14 Jun, 2008, 0050 hrs IST,Sumantra Das, ET Bureau
MUMBAI: The Baltic Dry Bulk index, the shipping index barometer for dry bulk vessel activity globally, on Thursday plunged 8.7% on Thursday after China ordered ports to cut iron ore stockpiles, impacting shipping stocks adversely.
Analysts said the index is down 963 points from its record close of 11,793 reached on May 20, 2008. On Thursday, the index touched 10,142. Shipping Corporation of India lost 3.10% to Rs 244.10, Great Eastern Shipping (GE Shipping) declined almost 4% to Rs 433.40, while Mercator ended flat at Rs 114.25 on the bourses.
The Baltic Dry Index is a measure of commodity shipping costs. It represents the cost paid by an end user to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts commodities on 40 routes across the world. The index, managed by the Baltic Exchange in London, had previously posted its biggest one-day skid of 443 points on January 17, 2008.
According to a Mumbai-based analyst, the Baltic Dry Index is likely to continue to fall over the next three months. This may in turn impact fortunes of companies such as Shipping Corporation of India (SCI), Great Eastern Shipping and Mercator Lines. He also said that the index’s reading for Capesize vessels, the largest drybulk carriers fell almost 16% on Thursday. Currently, the average Capesize vessel charter rates are ruling at about $1,80,000 per day as compared to more than $2,30,000 per day last week.
Analysts attribute the fall to China’s attempt to hoard supplies in an attempt to front-load industrial production ahead of the Olympics in August. Additionally, China’s plans to temporarily shut down many factories in an effort to limit pollution in Beijing during the games, is another factor leading to this situation.
The index takes into account shipping rates over a range of shipping routes for a variety of large vessels that transport dry goods including coal, iron ore and grain around the world. The index is viewed as a proxy for global demand of raw materials. The Baltic Dry Index has surged 88% in the past year, as China’s economic growth fuels demand for steel to make cars, offices and factories.
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MooFassa
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Posting #3: Sat Jun 14th, 2008 02:33 |
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Shipping stocks in Asia plunge
By Sandra Tsui and Marcus Hand - Friday 13 June 2008
SHIPPING shares in Asia plummeted Friday morning following the sharp fall of the Baltic Dry Bulk Index yesterday.
In Hong Kong, China Cosco, which took over its parent’s massive dry bulk fleet in January, was hardest hit. Its stock dived 8% in morning trade to HK$18.06 ($2.3).
China Shipping Development, which announced a $428m order for eight 76,000 dwt panamaxes this week, lost 6% to HK$21.45 by the end of the morning session.
Its affiliate, China Shipping Container Lines, although a container liner operator, was dragged down by poor sentiment and shed 4.6% to HK$3.12.
Shipping analyst Stella Kei from securities house UOB Kay Hian Holdings said the June to August period is traditionally the low season for bulk shipping as volumes of steam coke and grain shrink and port congestion ease, but the sharp fall of the BDI yesterday shocked the market.
Another factor contributing to the poor sentiment was that the lock-up period for the Shanghai-listed A-shares of China Cosco is due to end in two weeks.
The more resilient shares so far are handysize specialist Pacific Basin, whose shares fell as much as 3.6% to HK$10.7 apiece. They recovered slightly to HK$10.86 by the close of the morning session, but were still down 2.2% from yesterday’s closing.
Junhui Holdings, with most of its vessels being supramaxes, lost 2.6% to HK$4.56 a share.
“Pacific Basin has already locked its profit this year and the company will record special income from vessel sales earlier this year, it is thus less affected by the BDI fall,” said Ms Kei.
On the Singapore Exchange, shares in one of the world’s largest dry bulk owners and operators, South Korea’s STX Pan Ocean, fell 8.3% to S$2.77.
In Thailand, despite rates holding up for smaller-sized dry bulk vessels, shares of handysize and handymax specialist Thoresen Thai Agencies fell 7.4% to Baht40.50, while Precious Shipping was flat at Baht22.60.
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Posting #4: Sat Jun 14th, 2008 02:37 |
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Moolah
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Posting #5: Tue Jun 17th, 2008 01:35 |
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BDI lost another 227 pts! Down 2.35% to 9419!
posted on Llyods...
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Dry Bulk
SSY capesize index tumbles
Michelle Wiese Bockmann - Monday 16 June 2008
SHIPBROKERS Simpson, Spence & Young’s Pacific Capesize Index has fallen by a third in one week, ending Monday at 26,761 points.
The index, which mainly reflects shipping demand for iron ore and coal cargoes from Australia to Asia, lost 13,539 points.
Transpacific round voyage time charter earnings for 172,000 dwt vessels fell by $106,000 per day or 43% to $140,000 per day, the broker said.
“Rates fell dramatically as chartering activity slowed significantly amid easing congestion at Australian coal ports and the buildup of iron ore stocks at Chinese ports,” SSY said.
Leading the record falls has been mining giant BHP Billiton, which chartered more than 30 capesize vessels in May for loadings later that month to mid-June, pushing hiring rates to record highs by June 5.
But brokers say many more vessels than expected in the 790-strong capesize fleet are now available for hire on the spot market from late June.
So far this month BHP Billiton has hired only three capesize vessels to take iron ore from its Western Australian port to Asia in coming weeks, according to the Baltic Exchange fixture list.
The company has declined to comment about the positions it has taken in the market.
Brokers said available tonnage from late June, and a dearth of cargoes, has triggered the market correction.
SSY’s Atlantic Capesize Index fell by 25% or by 10,559 points in the week ending Monday to 33,138. The index covers cargoes from South America and the US to Europe.
Average capesize rates have fallen rapidly from a peak of nearly $234,000 per day to $159,200, losing a further $5,720 Monday on the Baltic Exchange.
The Baltic Exchange’s capesize index closed 407 points down at 13,553, after losing more than 2000 points last Thursday, a record, one-day fall.
The Baltic Dry Index was down 227 points to 9,414 points, after losing more than 15% last week.
“Despite the latest declines, the earnings are some 175% and 75% higher than five months ago, respectively,” SSY said.
Rates for panamax are also gently sliding, with indices falls pushing the average daily time charter to under $70,000 per day, after exceeding $91,000 per day in late May.
* Do you think capesize rates have peaked
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Moolah
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Posting #6: Tue Jun 17th, 2008 01:42 |
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Baltic Dry index fall hits shipping cos
14 Jun, 2008, 0050 hrs IST,Sumantra Das, ET Bureau
MUMBAI: The Baltic Dry Bulk index, the shipping index barometer for dry bulk vessel activity globally, on Thursday plunged 8.7% on Thursday after China ordered ports to cut iron ore stockpiles, impacting shipping stocks adversely.
Analysts said the index is down 963 points from its record close of 11,793 reached on May 20, 2008. On Thursday, the index touched 10,142. Shipping Corporation of India lost 3.10% to Rs 244.10, Great Eastern Shipping (GE Shipping) declined almost 4% to Rs 433.40, while Mercator ended flat at Rs 114.25 on the bourses.
The Baltic Dry Index is a measure of commodity shipping costs. It represents the cost paid by an end user to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts commodities on 40 routes across the world. The index, managed by the Baltic Exchange in London, had previously posted its biggest one-day skid of 443 points on January 17, 2008.
According to a Mumbai-based analyst, the Baltic Dry Index is likely to continue to fall over the next three months. This may in turn impact fortunes of companies such as Shipping Corporation of India (SCI), Great Eastern Shipping and Mercator Lines. He also said that the index’s reading for Capesize vessels, the largest drybulk carriers fell almost 16% on Thursday. Currently, the average Capesize vessel charter rates are ruling at about $1,80,000 per day as compared to more than $2,30,000 per day last week.
Analysts attribute the fall to China’s attempt to hoard supplies in an attempt to front-load industrial production ahead of the Olympics in August. Additionally, China’s plans to temporarily shut down many factories in an effort to limit pollution in Beijing during the games, is another factor leading to this situation.
The index takes into account shipping rates over a range of shipping routes for a variety of large vessels that transport dry goods including coal, iron ore and grain around the world. The index is viewed as a proxy for global demand of raw materials. The Baltic Dry Index has surged 88% in the past year, as China’s economic growth fuels demand for steel to make cars, offices and factories.
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Moolah
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Posting #7: Thu Jun 19th, 2008 13:48 |
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Dry bulk market warned to belt up for a bumpy ride
Shanghai: Asian shipping shares surged back during Monday’s trading following the dramatic dive in stock prices at the end of last week. Both dry bulk shipping companies and container lines had been badly hit as investors baled out following a slump in the Baltic Dry Bulk Index. Market sources are warning of significant volatility in the weeks ahead. China’s National Development and Reform Commission has announced plans to cut the country’s record stockpiles of iron ore and brokers point out this will result in less chartering activity on the world’s largest dry bulk trade �" iron ore from Brazil to China.
Monday’s new-found optimism, however, came as analysts pointed out that any reduction in Chinese demand for bulk shipping would be only temporary. As soon as iron-ore stocks have been reduced, just a many Capesize vessels, if not more, will be required. And it was this class of vessel that led the way down: last week more than $100,000 a day was wiped off potential Capesize earnings which, admittedly, have been extraordinarily high of late.
The market volatility comes against a backdrop of caution from brokers and market analysts. Rates on key routes, including Brazil to China, have reached levels in which the delivered cost of raw materials may not be economically viable. In other words, some say, shipping may be pricing itself out of the market. Oslo-based analysts at Nena Nordiske Energianalyse, for example, believe that there is a point at which high shipping rates result in delivered prices that make no sense. This could well be part of the reason why the Chinese have declared their intention to draw down on existing stockpiles or iron ore. [17/06/08]
http://www.seatradeasia-online.com/News/2739.html
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Moolah
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Posting #8: Thu Jun 19th, 2008 13:58 |
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Shipping Fares Plummet as Sino-Aussie Iron Ore Deal Stymied
June 18,2008
by CSC staff
Chinese-Australian iron ore negotiations are at a stand still, and Chinese steel companies are beginning to dip into the large iron ore stores they have sitting in the country’s ports. Shipments of the stuff from Australia and Brazil have been suspended and international shipping fares, lately on the steady increase, have taken a big hit.
On June 16, the average shipping fare for iron ore from Brazil to China’s ports at Beilun or Baoshan stood at $84.929 per ton, a slip of 20.32% compared with last Monday (June 9), and the average fare from Australia to the same ports was $30.636, a 38.64% fall over the previous week.
The Baltic Dry Index (BDI), an index covering dry bulk shipping rates, also declined. On June 12 it sagged by 963 points, 8.67%, marking the biggest single day tumble in its history. The next day it sank below 10,000 points, closing at 9646 points. The weekly fall reached close to 17%. On June 16, the BDI dropped a further 2.35% and closed at 9419 points.
Chinese steel companies’ suspension of renting ships for iron ore transport from Australia and Brazil was the major reason for the slump, a report from Shanghai Shipping Exchange indicated. The suspension was triggered by an order from the Chinese government to companies to reduce iron ore storage in ports. “When companies utilize the iron ore they have stored in ports, they transport less.”
Analysts say this suspension also aims to put pressure on the iron ore negotiations and won’t last long. May and June are usually a slack season. But this year, due to the stalled negotiations, many companies are moving as much ore as they can before June 30, the deadline for the iron ore supply before the new price is decided.
China’s surplus iron ore imports have accumulated a total storage as high as 79.22 million tons on May 15, a record high, and 50% up over the beginning of the year.
On May 20, the China Iron and Steel Association asked its member companies to control the total amount and the frequency of iron ore imports, and avoid further surplus storage. On June 10, four government departments, including the National Development and Reform Commission, repeated the request.
Earlier, shipping fares increased relentlessly. On May 22 the fare from Brazil to China was $106.396 per ton and $45.472 per ton from Australia, increases of 38% and 46%, respectively, over the price on April 22.
A report from China Merchants Securities shows the future need for dry bulk will again increase in the global trade and the average shipping distance will lengthen, and such factors will push up the BDI in this year’s third and fourth quarters.
http://www.chinastakes.com/story.aspx?id=445
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