Monday, December 15, 2008
Imarex Brief 15th December 2008
Tankers
Crude
VLCC Ag/East: ws 82.5 ($72k/day) same
Suezmax Wafr/Usac: ws 145 ($56k/day) firmer
Turkish Straits delays no data
VLCC activity has been mostly dormant as December requirements thus far covered
have reached close to the 100 level. It’s a Monday, so no surprise that things
are quiet, especially since Charterers of course prefer to wait to cover when
rates are soft. The strategy works fine…as long as they don’t overplay their
hand. When deals are getting done via cell phones during holiday
celebrations…Owners seem to bring their “A” game to the table. Suezmaxes have
bumped up once again as January stems have hit the wires…and strike delays in
Fos/Lavera continue to keep regional tonnage occupied at anchor.
Crude is up 8% to $50 as a major cut announcement from the cartel is expected on
Wednesday.
Crude FFAs have seen very thin trading as the physical VLCC market remains flat
and traders weigh OPEC cuts versus strikes and storage issues. TD3 Dec remains
flat at ws 80, in line with the MTD number. As we are about half way through
Dec, a month where business comes to a near grinding halt for its last ten days –
not much movement should be anticipated.
Clean
37k Cont/Usac: ws 175 ($16k/day) down 5‐10 points
38k Caribs/Usac: ws 160‐165 ($14k/day) about same
55kt Ag/East: ws 160 ($24.5k/day) touch softer
Though some activity exists in the Atlantic basin, rates appear to be softening.
Cont/ta is down another 5 points or so, while the Caribs/Usac route might be
losing some ground despite action on the USG/Europe backhaul route.
Not much action on clean FFAs. TC2 Dec sits at 178 – about where we see the spot
number. Barring a major development on this route, it is unlikely that the
current prices will change much over the next few days. In the East, volumes are
moderate. TC5 Dec and Jan both lose 3‐4 points to 165 and 118.
Dry Bulk
BDI 803 up 39
BCI 1454 up 123
BPI 450 up 10
BSI 486 down 4
BHSI 304 up 1
More good news from the dry sector as the BCI shows another impressive gain while
the BPI goes positive by 10 points. Spot fixing, period deals and scrapping are
all increasing to some extent – thus providing signs that the dire situation
might be becoming less dire. It’s still a long row to hoe, but the steady stream
of positive news has reduced sector pessimism a bit each day.
Dry Bulk FFAs
Contract Close Current Diff
======================================
BDI Dec 810 800 flat
BDI Q1 1750 1775 +25
BDI Q2 2075 2100 +25
CS4 Q1 $17,281 $16,750 +$531
CS4 Cal 09 $21,305 $22,250 +$945
PM4 Q1 $10,238 $10,750 +$512
PM4 Cal 09 $13,321 $13,750 +$429
SM6 Q1 $9,125 $9,200 +$75
SM6 Cal09 $10,922 $11,000 +$78
Volumes are thin, though prices continue to move north on signs that the physical
sector is improving. The Commodore sent me an article reporting that Tsuji Heavy
Industries has filed for bankruptcy. Tsuji is said to have an orderbook backlog
of about 46 dry bulk vessels of about 30k dwt each.
Equities
In ratings news…
‐ Scott Burk downgrades OCNF to UNDERPERFORM ($2.50) citing potential cash
flow/covenant issues and a suspended dividend, among others things.
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