Some More Bad News For Dry Bulk Shippers

Excel Maritime came out with this bombshell earlier, claiming that two major charters have begun paying cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 company dayrates at half cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 agreed rate, and that Excel is seeking legal action. The Baltic Dry Index, which is a representation of blended spot and charter day rates for various bulk ships (Cape Size, Panamax, Handymax) has been easily cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 most volatile index in recent months, and a great representation of how investors can get cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 woodshed treatment when cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y lock in long-term prices when cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 underlying spot value can fluctuate by over 90%. This is exactly what has happened to charter customers of dry bulk shipping providers such as Excel, Genco and Eagle Bulk Shipping.


(Baltic Dry Index, aka roller coaster for masochists)

Where previously ore transporters would purchase day rates on charter instead of spot rate to establish a price ceiling (at a time when Day Rates were higher than $100,000/day for Cape Size tankers), now that spot day rates have dropped by over 80%, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 charter customers find cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365mselves overpaying by up to 100% relative to spot rates. And cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y are angry, kinda like renters in New York locked in with long term leases. If cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Excel case is any indication, dry bulk companies that had been relying on charter rates to provide a downside price cushion, may now find cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365mselves ensnared in lengthy and expensive litigation as more and more charters decide to simply pay whatever cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y feel. In cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 meantime, companies like Excel, which has $1.4 billion of debt to service, or Dry Ships, which has a staggering $3 billion of debt, are praying for decoupling and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 skyrocketing of day rates, as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir fleets currently operate at significantly cash flow negative levels.

As an aside, speaking of Dry Ships, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 company's CEO is probably one of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 most colorful executives (in a non-criminal sense) of any company today. After he sank his first company, he managed to grow Dry Ships from $10/share to $130, briefly entering cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Forbes commodity billionaire club, and proceeded to ridicule all analysts and pundits who had previously made fun of his management skills at any and every possible venue, and provide ludicrous near-term profit projections. Ironically, with his stock at $4 again, a massively leveraged balance sheet, and bankruptcy staring him in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 face, George has been somewhat quiet lately, proving his critics right once again. Sphere: Related Content

Bookmark this post with:

• 
• 
• 
• 
• 
• 
• 
• 
• 

Print this post