GLG News by Mr. Craig Marston, Managing Director
GLG News is now G+ Insights
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November 5, 2007
Derivatives get thrashed | www.tradewinds.no
Prompted by a relatively small weakness in Capesize rates and concerns about the 2008 iron ore negotiations, the dry bulk freight derivatives market fell by 15% in a single day. This was a shock to the fledgling market which had seen liquidity soar on escalating dry bulk rates.
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Overcapacity In Container Shipping Very Evident
November 5, 2007
Carriers bouyant despite rate fall | www.tradewinds.no
Heavy demand in the Far East to EU/Med trade lane drove rates above the magic $2000/TEU level by mid-year, leading to earnings recovery amongst companies with a heavy presence in this lane. However, repositioning from weaker trade lanes has already let to rate reductions and load factors below 90%. Absent even higher demand growth levels in 2008, the situation will worsen.
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Jones Act Offshore Support Market Doing Well
November 2, 2007
Hornbeck net grows | www.tradewinds.no
Hornbeck Offshore (NYSE:HOS) reported 3Q07 net income up 20.9% as measured against a relatively strong 3Q06. The primary driver was an expanded fleet of modern OSV's, whose operating income was up 62% on the quarter.
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Yet Another Great Move By Navios Maritime
November 2, 2007
Navios goes cape crazy | www.tradewinds.no
Navios Maritime (NYSE:NM) acquired 5 capesize newbuilds due for delivery in late 2009 and early 2010 at a substantial discount to the current market, paying less than $100m on average. Navios also secured 13 vessels on charter for an average of 10 years, with purchase options. Navios also chartered two of their new builds to five year charters at very attractive rates compared to the forward market. Finally, Navios executed a purchase option on a Cape under charter for $20m, compared with its current $90m market value.
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Japanese Shipping Results Show The Value Of Diversification
October 31, 2007
Japanese three profits soar on bulk, container gains | www.americanshipper.com
The big three Japanese shipping firms; MOL (TYO:9104), NYK (TYO:9101) and "K" Line (TYO:9107) all showed impressive 1H07 net income improvements. All three have extensive holdings in multiple maritime segments, ensuring that a poor market in one division is offset by results elsewhere.
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OSG In For A Troubled Few Years In Tanker Shipping
October 31, 2007
Double whammy hits OSG | www.tradewinds.no
Overseas Shipholding Group (NYSE:OSG) reported a 70% drop in third quarter earnings despite a 24% increase in total revenue days. The difficult market is expected to last into 2010.
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Tanker Newbuild Conversions Good For Shipyards, Not Shipowners
October 24, 2007
Tanker orders turn to bulkers | www.tradewinds.no
An increasing number of shipowners are approaching major shipyards about converting their tanker and VLGC construction contracts into Capesize dry bulk carriers. Tanker and Gas rates remain anemic, while dry bulk rates remain exceptionally strong. For many reasons, this makes for bad economics and the number of actual switching contracts will remain low.
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Container Shipping Results A Mixed Bag
October 23, 2007
OOCL's revenue, volume rising | www.americanshipper.com
Orient Overseas' (HK:0316) 3Q07 results are indicative of container shipping in general: volumes are up in all trades, but short of capacity additions; rates are both up and down, depending on the trade; and everyone wants to speak about revenues, rather than earnings.
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Drought's Impact on Paraguay River Painfull For Ultrapetrol
October 19, 2007
Hidrovia still shrinking | www.tradewinds.no
Ultrapetrol (NasdaqGM:ULTR) derives a third of its earnings from its inland barging division. Drought conditions in the Hidrovia waterway region is greatly impacting river operations.
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Aegean Benefits From High Bunker Prices
October 19, 2007
Aegean buys bunker firm | www.tradewinds.no
Aegean Marine (NYSE:ANW) announced the acquisition of EU-based Bunkers at Sea, giving ANW an immediate presence in the large European bunker market. While the company only has two bunker tankers (Aegean will throw in a third), it services 45 ports in the region.
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DSX Prospects Good in the Short Term, Longer Term is Suspect
October 19, 2007
Tide higher for Diana | www.tradewinds.no
Diana Shipping (NYSE:DSX) shares shot up on news that they had purchased two more Capesize vessels and the subsequent positive reviews by analysts. While short-term earnings will grow considerably, 2010 looms large for DSX.
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October 18, 2007
Down on tankers | www.tradewinds.no
In a "closing the barn door after the horse has left" style, analysts have lowered earning forecasts for Overseas Shipholding Group (NYSE:OSG) and Teekay (NYSE:TK), citing the expansion of supply relative to demand "through 2011." The gloomy forecast is quite accurate, and likely puts OSG's dream of being the first $100/share tanker shipping stock out of reach for a few years.
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Steel Producers And Mines Missed The Boat For The Strong Dry Bulk Market
October 15, 2007
Chinese build up bulker fleets | www.tradewinds.no
Major Chinese Steel Produces, as well as mining giants such as Rio Tinto, are exploring building their own fleets of dry bulk ships in order to ensure reliability of shipments as well as to control costs. At this point, they are better off solving their problems through alternate means.
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Weakness Elsewhere in Container Shipping Putting Pressure on Asia-EU Trade Lane
October 15, 2007
Drewry report warns against overinvestment in Far East/Europe trade | www.americanshipper.com
Drewry Shipping Consultants' recent report on the global container shipping market warns that reliance on the strong Asia-EU trade lane to justify further capital investments is a questionable proposition.
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Older Dry Bulk Ships Facing Increasing Regulatory Pressure
October 15, 2007
Dry-bulk boom shows 'ugly side' | www.tradewinds.no
Detentions of older dry bulk ships for condition deficiencies is rapidly increasing, as Port States intervene where the market's natural self-policing functions are failing.
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Shortage of Panamax Tonnage Means No Limits on Capesize Rates
October 15, 2007
Two panamax cheaper than one capesize | www.tradewinds.no
Capesize rates have skyrocketed to over $180,000/day. At this point, it is cheaper to book two Panamax ships at $83,000/day. However, instead of Panamax rates creating a ceiling for Capesize rates, various factors mean that upward movement of Panamax rates will occur instead.
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Australian Issues Still The Major Driver of Dry Bulk Shipping Rates
October 11, 2007
Aussie wheat crisis twists up panamax rates | www.tradewinds.no
A weak wheat crop in Australia is boosting Panamax freight rates as grains must be shipped over longer distances to satisfy the shortfall, projected to be between 7 and 9 million tonnes.
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Overcapacity Driving Poor Tanker Rates
October 11, 2007
TEN forecast dampened | www.tradewinds.no
The temporary coexistence of newly built double hulled tankers with the still-operating single-hulled tankers they are designed to replace continues to keep liquid bulk shipping rates in the cellar.
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Container Shipping Costs Growing Faster Than Revenue
October 9, 2007
Study: Containership operating costs rise faster | www.americanshipper.com
Moore Stephens' annual study concluded that operating costs for container ships is up 10.8%. Combined with higher charter costs, higher terminal charges, higher inland shipping costs, higher bunker prices, and the much higher capital costs for new ships, cost growth is outpacing revenue growth.
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October 7, 2007
Ship order secrecy could tip supply and demand balance, says analyst | www.compairdata.com
French analysts, AXS-Alphaliner, released their fleet forecast will a qualified statement that a tendency to shroud new ship orders in confidentiality agreements may be understating the actual fleet growth. This is nonsense.
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