Monday, October 20, 2008
WeberSeas, Weekly Market Report Week 42
WEEKLY MARKET REPORT
October 17th, 2008 / Week 42
With all the indices in the red for the entire week and with the BDI down to levels last seen early in November 2002 there is certainly no change in the mood for the dry bulk market. Although today we witnessed a welcomed slowdown to the drop in the dry indices there is no way to know where this freefall will lead us in the near future and therefore, it is no surprise that we have no major 2nd hand dry bulk sales to report.
If we take a closer look at the BDI and BCI one can calculate the sharp drop in the market: (a) the BDI moving from it's 20 May 2008 peak of 11,793 points to today's 1,438 which is a drop of 10,355 points or nearly 88% of its value whilst (b) the BCI moving from it's 5 June 2008 peak of 19,687 points to this Friday's value of 1,776 points, a drop of 17,911 or nearly 91%.
Obviously the prices are correcting with owners considering much reduced levels for fresh ships in the market but with financing hard to find, there are very few real buyers there to move and as a result there are no deals concluded so as to allow us to assess where the real ship values stand today.
At the same time it is common knowledge that more than a few charterers (some strong charterers among them)
are facing problems. It has been in the news that Noble Chartering are moving legally against STX PanOcean the latter allegedly "breaking" a charter for the 2004 built capesize bulker "Mineral Noble" earlier than what was agreed creating a loss of earnings of $ 8 mill for Noble. In addition, we note that bankruptcy of Industrial Carriers with around 52 ships under their umbrella which was a company with offices around the world and with annual revenue of around $ 1 billion.
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