Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (115268)	1/4/2016 12:14:40 AM
From: elmatador	1 Recommendation Recommended By bart13 Respond to of 220341

China’s slowing growth and a glut of ships have hit earnings for vessels carrying coal and other dry bulk commodities so hard that owners face forced sales, emergency capital raisings and possible bankruptcy.Charter fees are not covering vessels’ operating costs, let alone their financing, in the latest bad news for the many private equity firms that have invested in the sector. Short-term charter rates for Capesize ships — the largest kind — were as low as $4,897 a day on December 23, down from more than $20,000 a day in August. Vessels typically cost around $13,000 a day to operate and finance. The Baltic Dry index, which measures overall average charter rates, has been at its lowest levels since it started in 1985. Basil Karatzas, a New York-based shipping consultant, said the market was “murder — a big mess”. “There has been no improvement whatsoever in trading,” he said. The slide partly reflected growth in the dry bulk fleet as vessels ordered in late 2013 and early 2014, many with private equity funding, were delivered. The net capacity of the world dry bulk fleet grew 3 per cent in the first 10 months of 2015, despite a spike in the number of older vessels being scrapped following the slump in rates. The impact of the fleet’s growth has been all the more severe because China’s slowdown has reduced an expected increase in trade in dry bulk commodities from 5-6 per cent over 2015 to zero. “As you combine that with the supply problem we already knew about, you get the worst conditions we’ve seen ever,” one senior industry figure said. The crisis has been made worse by the low oil price. As the price of fuel has fallen, charterers have ordered many shipowners to speed ships up instead of operating them slowly to save fuel. Michael Bodouroglou, chief executive of Paragon Shipping, an Athens-based, New York-listed dry bulk shipowner, said the increased speed was making the oversupply problem worse by increasing the fleet’s carrying capacity. Everybody who’s selling, especially good-quality assets, these days they really sell them because they need to - Michael Bodouroglou, Paragon Shipping chief Tweet this quote Paragon is one of at least four New York-listed companies — alongside DryShips, Scorpio Bulkers and Star Bulk — that were forced in late November and early December to announce sales of vessels to bring in cash. Mr Bodouroglou said operators were burning through significant amounts of cash because rates were not meeting their costs. “Everybody who’s selling, especially good-quality assets, these days they really sell them because they need to,” he said. The cash crunches at the listed companies affect two high-profile private equity investors in the industry: Monarch Alternative Capital, which holds an 18 per cent stake in Scorpio Bulkers and a smaller stake in Star Bulk; and Oaktree Capital, which controls Star Bulk.

To: bart13 who wrote (115268)	1/4/2016 1:56:05 AM
From: elmatador	Read Replies (1) \| Respond to of 220341

China’s slowing growth and a glut of ships have hit earnings for vessels carrying coal and other dry bulk commodities so hard that owners face forced sales, emergency capital raisings and possible bankruptcy.Charter fees are not covering vessels’ operating costs, let alone their financing, in the latest bad news for the many private equity firms that have invested in the sector. Short-term charter rates for Capesize ships — the largest kind — were as low as $4,897 a day on December 23, down from more than $20,000 a day in August. Vessels typically cost around $13,000 a day to operate and finance. The Baltic Dry index, which measures overall average charter rates, has been at its lowest levels since it started in 1985. Basil Karatzas, a New York-based shipping consultant, said the market was “murder — a big mess”. “There has been no improvement whatsoever in trading,” he said. The slide partly reflected growth in the dry bulk fleet as vessels ordered in late 2013 and early 2014, many with private equity funding, were delivered. The net capacity of the world dry bulk fleet grew 3 per cent in the first 10 months of 2015, despite a spike in the number of older vessels being scrapped following the slump in rates. The impact of the fleet’s growth has been all the more severe because China’s slowdown has reduced an expected increase in trade in dry bulk commodities from 5-6 per cent over 2015 to zero. “As you combine that with the supply problem we already knew about, you get the worst conditions we’ve seen ever,” one senior industry figure said. The crisis has been made worse by the low oil price. As the price of fuel has fallen, charterers have ordered many shipowners to speed ships up instead of operating them slowly to save fuel. Michael Bodouroglou, chief executive of Paragon Shipping, an Athens-based, New York-listed dry bulk shipowner, said the increased speed was making the oversupply problem worse by increasing the fleet’s carrying capacity. Everybody who’s selling, especially good-quality assets, these days they really sell them because they need to - Michael Bodouroglou, Paragon Shipping chief Tweet this quote Paragon is one of at least four New York-listed companies — alongside DryShips, Scorpio Bulkers and Star Bulk — that were forced in late November and early December to announce sales of vessels to bring in cash. Mr Bodouroglou said operators were burning through significant amounts of cash because rates were not meeting their costs. “Everybody who’s selling, especially good-quality assets, these days they really sell them because they need to,” he said. The cash crunches at the listed companies affect two high-profile private equity investors in the industry: Monarch Alternative Capital, which holds an 18 per cent stake in Scorpio Bulkers and a smaller stake in Star Bulk; and Oaktree Capital, which controls Star Bulk.