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Ton Mile Trader: Dry Bulk Weekly

The week began on sour note before the US market even opened as the “paper market” of

the FFA’s was being rattled as iron ore futures crashed the forward curve up to $8 at nearby segments and $10 spot. The Cape forward curve followed into the abyss as would

be expected given that hauling iron ore is the major role for the Capesize fleet. The

Panamax and Supramax curves were soon sucked into the wake of the sinking ore and

Cape paper and before the opening bell in NY; the bulker equities were poised for

trouble.

At midweek, the numbers out of London reinforced market fears as the BCI dropped a

staggering 445 points dragging down Capesize spot earnings by $4,602 in one day. The

bulker bashing continued with the equities in our coverage losing by over a 5:1 ratio.

The paper world provided some measure of relief with the FFA curves finding support

after the “correction” earlier in the week. The Cape indice on Thursday regrouped after

a 14% fall the day before and gained 54 points to lift the BDI. That positive development

did not filter down to the equities and the bulkers in our coverage posted two gainers, one

unchanged and 21 losers on the day.

On Friday morning, all the Baltic indices gained and nine more points lifted the BDI to

1477. The paper markets were reported as quiet as we have grown accustomed to on the

last day of the week. This may have helped the equities as the trading produced a better

(although still terrible) trading split with seven names gaining while seventeen lost value.

The week over week review we discuss today will not put any smiles on your face unless

you happened to have been shorting some of the names. The trading this week produced

two gainers and twenty-two losers for a 1:11 stomping ratio. The best performers were

VLCCF @14.00 (+26.13%) and NMM @18.21 (+1.34%). The Knightsbridge gains

coming after the mega deal announced with FRONT2012 selling them five Capesize

vessels and Big John throwing up another affiliated Cape. From the loser board we show

the worst performers in coverage being SB @9.69 (-15.22%), EGLE @4.39 (-16.38%)

and lastly NEWL @3.44 (-18.48%). The NEWL losses were trimmed Friday with an

announcement they had secured financing for two newbuilds and the trading ran up the

value by over seventeen percent easing the pain endured thru the week.

Source: Ton Mile Trader