Knightsbridge Shipping Ltd
Dry bulk shipping weekly analysis (Part 3: Construction rises)
Continued from Part 2 Ship construction activity Part 2 of this series explains how ship orders can illustrate managers’ expectations for future supply and demand differentials. But new ship orders don’t always translate into new constructions right away. Sometimes, shipping firms specify a particular date of delivery for the new orders. If the delivery date is farther […]
Dry bulk shipping industry players and performance
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%.
Iron ore shipments rose in June due to demand, positive for dry bulk shipping
China’s iron ore import data China’s iron ore import is a key driver of shipping demand, making up more than 75% of the world’s total iron ore shipments. So China’s import rising is positive for shipping rates—Capesize vessels in particular—which can give short-term support to share prices and a medium-term boost to companies’ financials. While […]
Early July steel output falls steeply, worrisome for dry bulk shipping stocks?
China’s steel output China’s steel output is a leading indicator of iron ore and coal demand. When steel output declines, the fall is often due to adjustments to weaker demand. As China makes up 70% of the world’s total iron ore imports, lower steel output will translate to fewer iron ore imports. This will hurt […]
Why China’s interbank rates have an impact on dry bulk shipping companies
The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So, a collapse in China’s financial industry would grind […]
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.
China’s thermal power output recorded a downfall
China’s power consumption in August was 502.5 billion kilowatt hours (or kWh). This was a decline of 1.5% from the levels last year.
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.
Why iron ore prices rising to two-month high is positive for dry bulk shippers
Commodity prices and shipping Commodity prices are leading indicators of an economic cycle. Because suppliers of raw materials require time to ramp up production, an increase in demand during an economic expansion will often lead to higher prices. As a result, commodity prices correlate highly with shipping. Iron ore prices On July 25, the price […]
Why China remains a risk for dry bulks as bank interest rate stays above average
The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So a collapse in China’s financial industry would grind […]
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.
Contrarian approach: why high valuation multiple is positive for shipping stocks (dry bulk)
Valuations can often tell investors the outlook of equities in the near future. Although value investors often look for valuations that are low, high valuations can often signal better times ahead. This is especially true for cyclical companies, such as steel producers and shipping companies, as has been mentioned by Peter Lynch in his famous […]
Why the dry bulk shipping industry is weakening
Numerous factors like world economic growth and commodity supply and demand affect the dry bulk shipping industry.
Must know: China’s crude steel production edging upwards
China’s steel production mills are reluctant to reduce output for fear credit could be cut off and market share captured by rival producers.
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.
Must-know: Weekly dry bulk shipping industry fundamentals update (Part 2)
Continued from Part 1 The importance of ship orders One measure that reflects managers’ expectation of future supply and demand differences is the number of ships on order. When managers expect future supply to increase more than demand, they refrain from purchasing new ships. However, when they expect demand to outpace supply growth, companies return to […]
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 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.
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%.
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.
Crude steel production run-up affects dry bulk shippers
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.
Monthly crude steel production’s YoY growth – 2014 declined
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.
Secondhand Vessel Prices Approach 15-Year Lows
Like the cost of newbuilds, secondhand vessel prices are also on the slide. Five-year old Capesize prices dropped to $33.1 million in February 2015.
China’s January PMI is below the expansion level
China’s official purchasing managers’ index (or PMI) declined to 49.8 in January 2015 from its December 2014 levels of 50.1.
How China’s slow real estate markets hurt the shipping industry
Accounting for almost 20% of gross domestic product (or GDP), China’s real estate sector plays a major role in the country’s economic activity.
5-year and 10-year ship prices for dry bulk companies
Vessel prices are very close to bottom levels that occurred back in the period from December 2012 to January 2013.
As 10-year ship prices rise, dry bulk companies’ value should increase
Higher secondhand vessel values While newbuild prices for Panamax vessels were weak (or neutral depending on how you see it), vessel values for 10 year old Panamax and Capesize continued its upward trend in March. Panamax vessel value rose 2.27% in March, increasing from $22 million in Feburary to $22.5 million in March. Capesize vessels […]
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.
China and India are driving seaborne coal imports by at least 20%
It’s not just about the iron ore, according to Navios Maritime Partners LP (NMM). Coal and grain will also be important drivers of demand for dry bulk ships.
Why you should watch 7 key industry indicators for shipping fundamentals (Part 4)
Continued from Part 1 Ship retirement can indicate excess capacity The rate at which companies retire ships often reveals whether the dry bulk shipping industry is facing excess capacity or not. When excess capacity pressures the shipping industry, firms will often retire older ships to alleviate pressure on shipping rates and maintenance costs. Nonetheless, high […]