According to the November Conference board LEI, the core capital goods orders for October totaled ~$38.4 billion, compared to a revised September reading of ~$38.7 billion.
According to the October Conference Board LEI, core capital goods orders for September were valued at $37.85 billion compared to a revised reading of $38.0 billion in August.
To demonstrate the power of efficient scale in creating economic moats, we highlight four companies: U.S.-based wide moats CSX Corporation and UPS, and international narrow moats Telefonica SA (Spain) and CapitaLand Commercial (Singapore).
China’s crude oil import: The most important factor An indicator that has a first-degree (direct) influence on tanker rates is China’s crude oil import volume. When import volume rises, more tankers will be in use, which pushes up shipping rates. Conversely, lower import volume means an increased number of idled ships, which leads to increased […]
Non-defense capital goods data Data on core capital goods orders, which exclude aircraft and defense purchases, is released by the US Census Bureau monthly. Investments in machinery, tools, and equipment by industries require capital outlay, and companies make them only when there is an expectation of increased demand. All new orders, shipped goods, and company inventories […]
Nondefense capital goods increase three months in a row Nondefense capital goods exclude aircraft and core capital goods. The census bureau releases a monthly report that includes data on core capital goods. All machinery, equipment, and tools used by industries requiring large capital investments are collectively known as core capital goods. The durable goods order […]
Manufacturing activity in Greece In July 2017, the manufacturing PMI (purchasing managers’ index) in Greece (GREK) remained steady. Operating conditions improved marginally, largely driven by a rise in output. The business conditions improved for a second consecutive month as of July 2017. Consumer sentiment is improving in Greece (EEM ), with improved tourism and growth […]
Dry bulk shipping vessel values have fallen to very attractive prices, especially for secondhand vessels. But investors are still wary of the downside ahead.
Recent events such as rising US production and the Iran nuclear deal have added to the oil glut. Contango is currently at $8.50 per barrel, which makes it an attractive trade for speculators and arbitrageurs.
Except for a few days in December 2014 and in January 2015, the Baltic Exchange Dirty Tanker Index has shown positive YoY growth. In May 2015, the index gained 25% on a YoY basis.
To date in 2015, the Guggenheim Shipping ETF, an index weighted with dry bulk shipping companies, increased 1.3%, while the Baltic Dry Index declined 28.3%.
Stockholders provided the equity through equity offerings, operating cash flows, and long-term borrowings. These funds have been treated as capital expenditures.
For the nine-month period ending on September 30, 2014, voyage revenue increased by $29.9 million, or 34%, to $117.9 million from the same period last year.
Tankships seeks to expand its fleet size through timely and selective acquisitions of additional secondhand modern tankers and the available optional vessels.
Despite a fall in the crude oil prices, tanker firms are looking to raise capital through the US markets. Crude prices recorded a dip of 46.8% in 2014.
The contango already led traders to stretch the available storage space for crude oil and products in Europe—despite a 30% capacity increase over the past five years.
Angeliki Frangou, head of Navios Group, expects 2015 to be an uncertain period. Factors include anemic growth in Europe and deflationary fears in Japan.
Navios Maritime Midstream Partners seeks to continue growing and diversifying its fleet of owned and chartered-in vessels though strategic acquisitions.
For 2014, the total coal imports were 291.22 million tonnes—compared to 327.1 million tonnes in 2013. This was after many years of double-digit growth.
The National Bureau of Statistics revealed that the December crude steel output in China increased 7.6% to 68.09 million tonnes. Steel output was up 1.5% YoY.
On a weekly basis, vessel prices indicate the current trading prices of Capesize, Panamax, Supramax, and Handymax vessels. They also indicate the weekly changes.
China accounts for a major share of dry bulk commodities’ imports and exports. In the past three months, the Guggenheim Shipping ETF (SEA) dropped 6.1%.
DHT Holdings is an independent crude oil tanker company whose fleet consists mostly of VLCCs and a few Suezmax and Aframax vessels trading internationally.
The Baltic Dirty Tanker Index widened to 862 on December 24, 2014, from 639 on October 1. It recorded a 34.9% increase as China increased imports of raw goods.
Energy transport is driven by global economic growth and dislocation of consumption and production, reflected in cyclical freight rates that vary according to vessel supply and demand.
Star Bulk management stated that commodity demand remains healthy, while substantial supply expansion has resulted in surpluses across various commodity markets.
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.
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 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 […]
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 Carriers’ fleet includes 52 operating vessels, 16 second-hand vessels yet to be delivered, and 35 newbuilding vessels still under construction.
Frontline recorded better vessel earnings compared to the second quarter. Improved fleet utilization was due to increased travel distance driven by crude moving from the Atlantic Basin to China.
Frontline Ltd. (FRO) is engaged mainly in the ownership or operation of oil tankers used to transport crude oil. It’s owned by Norwegian shipping magnate John Fredriksen.
Looking ahead to 2015, Teekay Tankers Ltd. (TNK) forecasts 2.0% net global tanker fleet growth with major contribution from the product tanker sector. There is a negative fleet growth estimate for the Suezmax and uncoated Aframax sectors.
Teekay Tankers generated $16.2 million, or $0.19 per share, in the third quarter of 2014 of cash available for distribution (or CAD). This compared to $8.7 million, or $0.10 per share, in the third quarter of 2013.
The revenue mix for Teekay Tankers Ltd. (TNK) is largely contributed by the net pool revenues. The company has developed secured charter-in contracts and created a significant base for the company’s future growth.
On July 28, 2014, the board of directors of Scorpio Tankers (STNG) approved a new stock buyback program with authorization to purchase up to $150 million of its common stock.
Navios Maritime Acquisition’s (NNA) management commented that for 2004–2013, transportation demand—expressed in ton miles—is expected to increase by ~77%.
For 2014, 99.4% of NNA’s fleet is contracted. It’s expected to have a contacted daily charter-out rate of $18,549 per day. For 2015, 56.9% of the fleet is contracted out.
NNA’s senior notes mature at the end of 2021. There aren’t any debt maturities on bank debt until 2016. NNA estimates that leverage ratios will continue to decrease.
As of September 30, 2014, cash and cash equivalents, including NNA’s restricted cash, totaled $72.3 million—compared to $107.8 million recorded as of December 31, 2013.
For the week ending November 21, total product supplied was 20.5 million barrels per day—compared to 20.1 million barrels per day in the third week of October.
Looking ahead, many factors are likely to positively influence the shipping market and the companies that play in it. For example, India’s increasing appetite for coal has caused Capesize and Panamax rates to surge by 94% and 49%, respectively.
Orderbooks of Suezmax and Aframax fleets remain at manageable levels, with the majority of new orders due for delivery in the second half of 2016 or later.
George Economou, the company’s chairman, president, and chief executive officer, purchased $80 million, or 57.1 million shares of common stock at the public offering price. With this purchase, Economou increased his ownership in DryShips to 16.9%.
DryShips notes that it has significant leverage in the dry bulk and tanker spot markets. So, positive developments in these sectors will result in substantial cash flow to its bottom line.
With rising energy demand from the economic powerhouse of Asia, China has been buying more oil from abroad amid a slowdown in the economy’s growth rate.
The number of US oil products supplied indicates the consumption of petroleum products. It measures the disappearance of these products from primary sources like refineries.
Since secondhand vessels can be delivered within a few months, they tend to reflect industry participants’ expectations for medium-term fundamentals and rates, unlike newbuilds, for which two years of delivery time is mandatory.
The Baltic Dirty Tanker Index interests analysts and money managers. They use it to assess the revenue and earnings potential of the crude oil shipping industry.
China’s crude steel production is a key indicator that dry bulk shipping investors should watch. This is mainly due to iron ore primarily being used to manufacture steel.
Newbuilds versus second-hand vessel values Second-hand vessels are characterized by faster deliveries, so they reflect short-to-medium term fundamentals. Second-hand vessel prices tend to be more responsive to changes in current rates compared to newbuilds, which are affect by changes from industry turnarounds. On the contrary, buyers and sellers of newbuilds have to wait for almost two years […]
Growing construction activity in the global arena leads to significant demand for iron ore and coking coal, which expands the seaborne trade of these dry bulk commodities.
Coal trade saw significant changes over the past few years. China was a net coal exporter in 2009—only five years ago. Today, it’s the world’s largest importer.
