Shipping to benefit from shifts in global refinery capacity
US refinery capacity increasingly serves export markets. As a result, the ton mile growth of refined oil products is outpacing general demand for them.
Led by economies of scale over long distances, crude is more likely to be shipped via very large crude carrier.
A strong increase in tanker rates is allowing Navios Maritime Acquisition to secure attractive contract periods for its fleet of charters.
This global multidirectional trade pattern enables product tankers to triangulate, which minimizes balance time and maximizes revenue.
Navios Acquisition’s product tanker chartering strategy focuses on the upside potential by using profit sharing arrangements on most available days.
For the full-year 2015, Navios Maritime Acquisition expects to pay dividends of $15.7 million. A 4Q 2014 dividend of $0.05 per share will be paid in April.
Navios Acquisition is a low-cost operator. Its current vessel daily operating expenses are about 18% below the industry average.
As current fuel prices fall below log-time inflation, the adjusted average oil price leads to contango, and that drives VLCC rates higher.
In 4Q 2014, revenue increased by $14.6 million, or 25.2%, to $72.4 million, up from $57.8 million for the same period in 2013.
Since January 2009, China’s oil imports have more than doubled, at a 16% compounded annual growth rate. It will need ~14 million barrels per day by 2035.
A $1.4 million increase in the net earnings equity of affiliated companies was partially offset by a $2.5 million increase in management fees.
The operations of Navios Maritime Acquisition Corporation (NNA) are managed by Navios Tankers Management, a subsidiary of Navios Maritime Holdings (NM).
The industrial production has been stagnant for several quarters now. The slowdown in Europe also impacts mining giants like Rio Tinto (RIO) and BHP Billiton (BHP).
The European steel industry is reeling under the impact of steel imports. In recent months, steel imports reached historic highs.
The rise in vehicle sales in China is positive for the steel industry. It would lead to higher steel demand from the automobile industry.
In China, the infrastructure sector is the largest steel consumer. This makes the Chinese real estate market a key driver of global commodity markets.
The fall in China’s manufacturing PMI is a negative sign for the global steel industry. It signals a slowdown in industrial demand.
Surging Chinese steel exports are a big challenge for the global steel industry. Chinese steel exports increased by ~50% last year.
In January, Indian steel production was flat on a YoY basis. Steel consumption is expected to increase. The new government has a clear focus on infrastructure creation.
The Japanese steel industry also benefited from Abenomics. Steel production picked up as a result of the policies. A weaker yen also benefited Japan.
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