Star Bulk Carriers Corp.
Star Bulk (SBLK) Stock Is a Good Buy in Cyclical Shipping Industry
Iron Ore Port Inventories Don’t Cheer Dry Bulkers
Iron ore port inventories have been steady. For the week ending August 14, inventories were 81.5 million tons—an inventory-to-steel production ratio of 1.23x.
China’s iron ore market dynamics: A positive for Star Bulk
Star Bulk (SBLK) believes that the substitution of expensive Chinese iron ore production with imported iron ore can provide a significant support to iron ore trade, even with zero steel production growth.
China’s Real Estate Climate Index Inched Up Marginally in June
China’s real estate climate index has been below 100 since October 2011. A slowdown in the Chinese real estate industry is negative for the iron ore import trade as well as for dry bulk shipping.
As China’s key coal imports fall to just ~0%, is there an upside?
As thermal power output growth has fallen, so has the growth for China’s coal imports from Indonesia and Australia—the two key countries that supply seaborne coal.
China’s key economic conditions: Industrial and electricity output
Because reporting entities sometimes like to dress their numbers up a bit to look nice, analysts also look at electricity output—where government officials say they don’t have much incentive to cook the numbers.
What Do Fundamental Bulk Shipping Indicators Say?
The BDI (Baltic Dry Index) is a leading indicator for the bulk shipping industry. It’s a measure of the cost of shipping major bulk commodities on a number of shipping routes.
DryShips tries to reduce debt and improve its value-to-loan ratio
There’s no denying that debt is DryShips’ main concern going forward. The company’s debt stood at a total of $6 billion at the end of the first quarter, up around $500 million quarter-over-quarter.
Chinese Steel Demand Doesn’t Look Good for Dry Bulkers in 2016
In this part of our series, we’ll explore how steel demand from the construction, machinery, and infrastructure sectors could shape up in 2016.
Should Dry Bulkers Expect Much from Coal Imports in 2016?
Many market participants are forecasting a further fall in coal imports for China in 2016.
Why the Baltic Dry Index is decreasing
The Baltic Dry Index measures the cost of major raw materials. The raw materials are transported by sea in the global economy. It indicates a strict demand supply price situation.
Why investors should look into DryShips’ financing commitments
DRYS has received firm commitments for a total of up to $520 million from ABN AMRO and Nordea Bank. This is the first major milestone towards the refinancing of the company’s 5% convertible notes maturing in December.
Recommendation: Capitalize on dry bulk shipping’s cyclical waves
The dry bulk shipping industry is cyclical mainly due to economic or business cycles as well as a long lead time between the placement of orders and the delivery of new vessels.
Demolition Activity: Dry Bulkers’ Light at the End of the Tunnel?
The demolition market for dry bulk carriers has been very active lately.
Dry bulk opportunity: The Baltic Dry Index might have bottomed
The BDI (Baltic Dry Index) is a widely followed metric that reflects the overall rates of moving dry bulk cargoes like iron ore, coal, and grain across water.
A must-read overview of DryShips’ 2nd quarter 2014 earnings
Formed in September 2004, DryShips Inc. (DRYS) is a global shipping transportation company. It offers ocean transportation services for dry bulk cargoes and crude oil worldwide.
What are the Rate Expectations for Dry Bulk in 2016?
Though increased scrapping and minimal ordering activity could provide some relief on the supply side, the outlook for 2016 isn’t looking good for dry bulk.
Morgan Stanley upgrades dry bulk and VLCC, SBLK, SB, DSX rally 10%
Dry bulk shipping companies are rallying on Morgan Stanley’s review claiming that shipping is at the start of a two-year rally.
What’s the Outlook for Star Bulk Carriers?
If dry bulk demand picks up, Star Bulk Carriers (SBLK) with its large fleet would be in a position to capitalize on the upswing.
Star Bulk comments on coal and grain
Star Bulk believes the recent coal import restrictions were minimal, while the freight rate agreement signing between Australia and China can be a positive development.
Dry bulks: NMM’s CEO says “we’re in a very early stage of recovery”
Investors should recall that the shipping industry is highly cyclical, as demand for fleets is driven by economic cycles and supply is inelastic for about two years—the time it takes to build vessels.
Port Hedland Iron Ore Exports Were Weak in July
The bulk of the world’s seaborne iron ore exports come from Australia. According to customs data, Australia supplied 59% of China’s iron ore imports in 2014.
China’s Manufacturing PMI Is the Lowest in 1 Year
China’s HSBC manufacturing PMI fell to 48.9 in April. This is the lowest level since April 2014. A reading below 50 indicates contraction.
Depreciation expense increases; Star Bulk addresses capex fund
Star Bulk’s depreciation and interest costs Star Bulk Carriers Corp.’s (SBLK) depreciation expense increased to $10.7 million for the third quarter of 2014, compared to $4.0 million for the third quarter of 2013. The increase was due to the increase in the company’s average number of vessels in its fleet and the corresponding increase in […]
What is Star Bulk’s vessel financing status?
Due to rapid expansion, Star Bulk’s financing levels are higher compared to its industry peers.
Changes in Star Bulk’s management fees and operating and net income
Star Bulk’s management fee income is at $0.3 million compared to $0.5 million for 3Q13, due mainly to a decrease in the number of vessels under management.
Star Bulk’s liquidity and cash flow
This part covers Star Bulk’s cash flow numbers given the company’s rapid expansion of its fleet size through acquisitions and other related developments.
Dry bulk trade demands Star Bulk dynamics
Star Bulk management stated that commodity demand remains healthy, while substantial supply expansion has resulted in surpluses across various commodity markets.
Overview: Star Bulk Carriers’ earnings and fleet
Star Bulk Carriers’ fleet includes 52 operating vessels, 16 second-hand vessels yet to be delivered, and 35 newbuilding vessels still under construction.
Perfect timing for Star Bulk’s fleet acquisition
Star Bulk merged with Ocean Bulk in July, right after the high price levels of March weakened. It took advantage of even lower vessel prices in its Excel acquisition in August.
Star Bulk comments on Chinese and Indian coal markets
Star Bulk Carriers Corporation (SBLK) remains confident that imports will produce strong ton miles growth during the medium term due to substitution of poor quality short-distance imports with high-quality long hauls.
Grain trade outlook may boost Star Bulk’s vessel demand
During the second half of 2014, Star Bulk Carrier Corp (SBLK) might experience a combination of healthy U.S. exports. If the estimated scenario is correct, the Panamax and Supermax will enjoy increased exports and significantly boost vessel demand.
Star Bulk overview: Fleet and business strategy
Star Bulk’s fleet profile enables it to serve its customers in both major and minor bulk trades, and its vessels are able to trade worldwide in a multitude of trade routes carrying a wide range of cargo.
Star Bulk could become largest U.S. dry bulk shipping company
Star Bulk Carriers Corporation (SBLK), a global shipping company focusing on the transportation of dry bulk cargoes, is en route to becoming the largest U.S. listed dry bulk shipping company.
Star Bulk’s countercyclical Excel Maritime acquisition
Star Bulk Carrier’s (SBLK) acquisition from Excel Maritime is well-timed from a short-term and a long-term point of view. The company acquired Panamax/ Kamsarmax vessels at historically low prices, with Panamax vessel prices currently at the lowest level in 2014, a 21% decline compared to its peak in April.
Newbuilding program means stable outlook for Star Bulk
Going forward, Star Bulk Carriers’ (SBLK) focus remains on integrating the newly acquired fleet into its highly efficient platform. It will also continue to monitor and assess the market for further accretive growth opportunities.
Second quarter expenses on the rise with expanding vessel base
Star Bulk’s vessel operating expenses totaled $8.1 million, compared to $6.8 million in year ago quarter. This was due to a higher average number of vessels in the second quarter of 2014 compared to the second quarter of 2013.
Star Bulk eco fleet and Newcastlemax vessels a benefit for the company
By using Newcastlemax vessels, Star Bulk Carriers Corporation (SBLK) experiences a significant reduction of dollar per ton cost on major routes during a high bunker environment. The benefits of eco are improving cash flow during a high-freight market and downside protection during a low-freight market.
Major importers and exporters of grain and oilseed
Compared to iron ore and coal, the grain and oilseed trade makes up a much smaller part of overall dry bulk shipments—about 10%.
Key players involved in the global seaborne coal trade
Coal (a fossil fuel) is another large category of dry bulk shipped by dry bulk shippers, comprising close to 30% of total dry bulk shipments.
Why dry bulk shippers can benefit from China’s record new loans
Loans play an important role in helping an economy grow by stimulating consumption and investment and creating greater overall demand.
Why dry bulk shipping closely correlates with the world economy
Unlike other industries, the performances of dry bulk shipping companies highly correlate. These companies are directly impacted by the world economy.
Have dry bulk shippers like Navios gotten ahead of themselves?
We’ve learned through previous research that week-to-week movements in the Baltic Dry Index don’t really have a strong relationship with week-to-week movements in dry bulk shipping stocks.
The illusory connection of the Baltic Dry Index and stock prices
Recent movements between the BDI (Baltic Dry Index) and dry bulk shippers have some investors suggesting the BDI highly correlates with stock prices.
A growing fleet increases Star Bulk’s voyage revenues
For 3Q14, Star Bulk recorded total voyage revenues of $36.5 million compared to $17.3 million for 3Q13. This increase is due mainly to its growing fleet.
Star Bulk merges with Oceanbulk, Heron, and Pappas
In the merger, Star Bulk issued a total of 54.1 million common shares to the entities involved, of which 45.5 million shares (61.3% shareholding) were issued to Oaktree and 8.6 million (12.6% shareholding) were issued to Pappas shareholders.
Some Activist Investors Are Betting that SBLK Has Hit Bottom
Hedge funds like Caspian, Oaktree, and Monarch are going against the crowd by pinning their hopes on the assumption that SBLK’s share price has reached its floor.
Newbuild Vessel Prices Remained Steady in July
Newbuild vessel prices for all of the ship sizes remained constant in July 2015—compared to June 2015—according to data from Athenian Shipbrokers.
Dry Bulk Shipping Industry’s Swinging Fortunes
So far, 2015 has been a roller coaster ride for the dry bulk shipping industry. The Guggenheim Shipping ETF (SEA) has fallen by 12%.
Record Port Hedland Iron Ore Exports: Good for Dry Bulk Shipping
Iron ore exports from Port Hedland totaled 38.4 million tons in June. In May, exports totaled 38 million tons. So that’s a jump of 14.3% year-over-year and 1.1% month-over-month.
China’s Manufacturing Purchasing Managers’ Index Still below 50
China’s final reading of the manufacturing purchasing managers’ index came in at 49.4. Factory activity in China has been below the 50 mark for the last four months.
Where Is the Dry Bulk Shipping Industry Headed?
In this series, we’ll discuss some of the important metrics that drive the dry bulk shipping industry. Investors can gain exposure to commodities through the SPDR S&P Metals and Mining ETF (XME).
China’s Iron Ore Imports Decline: Pressures Dry Bulk Shippers
China consumes close to two-thirds of the global seaborne iron ore. In 2014, China imported 932.5 million tons of iron ore—13.8% more than in 2013.
Falling Dry Bulk Orderbook: Positive for Dry Bulk Shippers
If the orderbook level continues to fall more from this point and demand continues to grow, we could see some life in dry bulk shipping rates and equities.
Dry Bulk Shipping Industry: Performance in 2015
Dry bulk shipping got a major boost from China’s increased appetite for iron ore and coal almost eight years ago. Large ship orders are driving the current oversupply.
Port Hedland Records Higher Iron Ore Exports
On a month-over-month basis, iron ore exports to China from Port Hedland increased marginally to 30.25 million tons in February 2015.
Port Hedland’s iron ore exports are on the rise
Shipments through Port Hedland represented 55% of Australia’s iron ore exports last year, and more than 80% of cargoes go to China.
Why coal imports drop as China resorts to renewable resources
Meanwhile, total generation capacity stood at 1,251.22 gigawatts (or GW)—a 9.4% YoY increase.
Why Port Hedland’s iron ore exports dropped in June
June exports through the port increased 21% compared to the volumes last year.
The effects of nickel ore and bauxite export bans could linger
With Indonesia having no intention of reversing its policy and few alternatives, year-over-year growth will likely continue to fall until the end of 2014.
China’s nickel imports show the gravity of Indonesia’s export ban
A survey by Bloomberg pointed out that traders and factories in China held about 29 million metric tonnes of nickel stockpiled at ports.
Why China saw high growth in iron ore and coal imports in January
China’s iron ore and coal imports are key factors that drive shipping rates. Iron ore and coal each account for nearly 30% of the world’s dry bulk trade volume.
A pollution problem will support seaborne coal trade from Australia
According to Diana’s earnings call, Clarksons predicts that 2014 world seaborne imports of coking coal and thermal coal will increase by 5% and 4%, respectively.
On the supply side, how optimistic are dry bulk shippers?
Entering 2014, dry bulk shippers seem to be picking up their optimism again, which is clear in their recent activity purchasing new ships, despite the continuous fall of the Baltic Dry Index.
Why seaborne iron ore could replace China’s iron ore
The sharp rise in the Baltic Dry Index that many analysts saw first in late August and second in November was in part driven by restocking activity of iron ore at Chinese ports.
Why dry bulk shipping stocks fell more than seasonality suggests
Because vessel supply is inelastic, rates can shoot up given a small change in demand. This is shown as the sharp rise in the year-over-year change in the BDI in late 2013.