London – The Baltic Exchange
BDI down 1 at 512…
Despite the world economic turmoil the BDI managed to loose just one point giving some breathing space until the Chinese New Year Festivities are over…
The BCI was up one at 543, the BPI down 2 at 512, the BSI plus 2 at 492 and the BHSI down 4 at 266 points suggesting a stagnation on all dry bulk categories; a levelling of the market if you like.
On the wets though, despite the minimal fall of the dirties with the BDTI down one point at 840 and the stable cleans at 600 flat (no change), things are looking promising as even if all indicators are negative then what is expected is the rise of all indices. When this will happen, for sure it will be celebrated to the full, particularly when we go over the 2, 000 on the dries and 1, 000 on both wets.
Now, just think what the dry index real value is compared with the markets back in 1981 when the first collapse happened; Opex where US$ 2, 000 for a conventional SD14 and 3, 000 for a first generation panamax – today a modest US$ 6, 500/7, 000. And what about the price of fuel, diesel/gas oil and lubs? And what about the newbuilding prices? In no way you can compare the cost of newbuildings which at a time stood US$ 68 million for a 75, 000 dwt panama and now you can built her for a mere US$ 20 mio. But where’s the money… Can the funds move in fast and make your day, as now is a buyers market minimising the down side risk and promising handsome capital gains when the market peaks up…
The Box trade looks promising under some clever amalgamations… Liner giants must remember the David and Goliath fable…
LNG might assist the investors appetite but geopolitics are still tough and infrastructure still primitive…
Make sure you include in your market projection some economic catastrophes, as some nations will go under… What if Japan breaks up given that its total public debt approaches the 300 centum of GDP, a big rise since last year? And what about China’s future… Who will digest the Greek debt? Will this ever be paid? Add some geopolitical extreme apocalyptic situations, coupled with religious fanatism and see where you stand… We are living in interesting times and more interesting times are on the way… Some people will feel the rain, whilst others will just get wet…
Be ready to capitulate on the best market which is on its way; then the “when” remains a secret for the very few.
