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SOB's really screwed me over stopping me out,
the bastards
FALSE BREAKOUT I STOPPED OUT RIGHT AWAY
TRY AGAIN SOMEWHERE IT WILL BOUNCE
UNLESS THEY ARE GOING BANKRUPT
just got a confirm for 1 share, unreal. geezus. where'd they find that one in the Presidents top drawer, oh here, I found a share,
give it to stan.
I'll tell ya, I had a bid starting at 6.36, finally raised it to 6.39, somebody hit me with 4 friggin shares, still waiting to fill
order, nobody seems to want to sell, geezus.
if you are still around, I think I'll be entering a small position tomorrow
looks like she's about bottomed out here
putting this here for myself to watch correlations.......
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at some point here, TORM gonna be a buy, just a hunch.
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book value 17.60?
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wow, this stock really taking it on the chin lately, maybe
bankruptcy around the corner, I had read this one time in one
report that TORM could not make ends meet, a merger is all that will help here me thinks.
sale of 2 vessels and orders new......
you think we should start accumulating for down the road.?
looks like a solid bottom, just patience needed.
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Morningstar- Our Dry-Bulk Shipping Projections: Sink or Swim?
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By Adam Fleck, CFA | 10-27-10 | 06:00 AM | E-mail Article
As equity analysts, we're often tasked with predicting the future, and we don't always get everything right. That said, we think it's important to continuously examine our track record in our coverage areas, in hopes of learning where we were correct and where we can glean additional insights. In particular, the dry-bulk shipping industry has proven an especially difficult focus area to projects due to its dearth of economic moats and intense volatility. We've written extensively about the sector over the past 18 months, and we want to analyze whether our original assumptions proved accurate while also noting when we may have been incorrect.
In this article, we will examine projections outlined in our two most recent shipping articles: Feb. 26, 2010's "Rough Waters Ahead for the Dry-Bulk Shipping Industry" and June 26, 2009's "Waters Remain Choppy for Shipping Stocks." After reviewing the articles, several key themes become clear. Overall, we believed that:
1. Structural oversupply would threaten industry participants' profitability.
2. Ships would continue to face continued delays, but outright cancellations and scrapping of older ships would likely remain minimal.
3. China's iron-ore import demand was due for a pullback from incredibly robust levels.
4. Some firms would not survive the then-downturn, and a wave of bankruptcies could threaten vessel owners.
5. The question is, then: Were we correct? Plus more importantly: What do we believe now?
Structural Oversupply
After seeing a slew of new vessels during the halcyon days of 2007 and 2008, dry-bulk ship owners and shipyards began to experience vessel delivery delays in 2009, with upwards of 40% of scheduled orders pushed back into 2010. The industry has watched about the same percentage of ships slated for construction this year fall into 2011. In February 2010, we wrote, "Some of these ships will likely face continued shipyard delays … even with additional delays, we forecast double-digit growth in total vessel capacity."
Here, the supply side's growth rate has borne out our thinking. Through September, the total deadweight tonnage of operating ships has already increased more than 11% since the end of 2009, and nearly 15% over the past 12 months.
Due to this robust supply growth, dry-bulk owners--especially those owning large Capesize vessels--have watched average daily shipping rates drop from the summer of 2009. Although economic activity has generally improved from June of last year, the Baltic Dry Index, or BDI (a measure of dry-bulk spot pricing) has declined to about 2,700 today from 3,700. As mentioned, Capesize owners have seen average daily rates fall to around $34,000 from $68,000 in June 2009, whereas pricing for smaller vessels has remained generally stable; much of this is due to China's changing demand for iron ore (Capesize ships carry almost exclusively iron ore and coal), and the large proportional amount of ordering that favored Capesize ships versus their smaller peers.
Nonetheless, our prediction from last year that the industry would see "further boom and bust cycles as supply becomes constrained by short-term factors" also proved correct. Although the BDI has generally fallen for Capesize ships, for instance, rates have risen as high as $66,000 per day and as low as $16,000 due to waxing and waning port congestion, changes in China's iron ore and coal demand, and actions by key export centers such as India.
Looking forward, we've become concerned regarding the recent ordering activity of vessel owners. Unsurprisingly, such activity dropped to basically nothing during the doldrums of 2009, but the subsequent rise in the Baltic Dry Index has led to an increased amount of new vessel orders.
We think these orders highlight the minimal barriers to entry and intense competition within the dry-bulk shipping space, and help to anchor our beliefs that economic moats are nearly impossible to carve for industry participants.
Scrappage Has Proven Minimal
On top of the recent spike in ordering activity, in June 2009, we wrote, "We remain skeptical that cancellations within the massive order book for new ships and scrapping of older vessels will fully offset supply increases over the next several years"; again, recent industry figures seem to support our hypothesis. As previously discussed, the dry-bulk fleet continues to see order delays, but owners have generally avoided outright cancellation. That said, this number could creep up, as we've heard that some of the recent aforementioned orders could be replacing some slots in shipyard order books that have yet to be removed.
However, vessel demolition has fallen dramatically as shipping rates have rebounded to profitable levels. Through the first nine months of 2010, owners have scrapped approximately 4.2 million deadweight tons of capacity, or about 470,000 tons per month. This figure compares to nearly 820,000 tons scrapped monthly in 2009, on average, and 433,000 tons per month in 2008. Although nearly 15% of the world's fleet is older than 25 years (a typical life of a vessel), we continue to believe that scrapping will play the part of a buffer against prolonged hampered rates rather than a catalyst toward astronomical rate hikes.
When we combine all of these figures, we think that even if the dry-bulk shipping industry sees increased vessel demolition combined with cancellations and slippage that reach 50% of the scheduled deliveries, the fleet is slated to climb more than 10% in 2011. More worrisome, the expected drop-off in supply growth beginning in 2012 and beyond could face pressure if owners continue to order in abundance.
Iron Ore Growth Rates Anemic, Worse Yet to Come?
Year to date through August 2010, China has imported just 1% more iron ore versus the same period in 2009. This cargo comprises about a third of dry-bulk ton miles, and shipments to China represent more than two thirds of this total. As such, China's monthly demand figures tend to be the tail that wags the dry-bulk dog. In late 2009, cheap imported iron ore (versus domestically-sourced supply) led China to buy a monthly average of almost 56 million tons of the commodity from external sources in the period of September to December 2009. However, we wrote in February 2010, "Price negotiations with Australian and Brazilian miners will likely lead to further swings in monthly imports, but we don't believe the spike in late 2009 is sustainable." Was our projection correct?
As shown above, China's monthly iron ore imports have fallen off slightly, averaging about 51 million tons through August, but are still 32% higher than 2008 levels. Though we wouldn't give ourselves a very good grade thus far in regards to this outlook, we note that recent trends could still bear out our thinking. Primarily, the Chinese government has begun to restrict domestic steel makers' electricity usage due to a countrywide power shortage. While the scenario is clouded in uncertainty, we think a pullback in near-term steel production would be met with a similar decline in iron ore shipments.
Nonetheless, though we continue to forecast reduced iron ore deliveries due to this electricity situation, we also see a strong likelihood that China will need higher amounts of imported thermal coal due to the current scenario. Moreover, further South American sourcing of the commodity and the continued emergence of Africa as an import target should increase travel distances, additionally boosting demand. Overall, we expect demand growth to average in the mid- to high-single-digit range over the next several years, above historical averages.
Bankruptcies Among Public Ship Owners Rare
We wrote in June of last year, "We're concerned that some firms may not survive the current downturn"; by and large, we were dead wrong. Though some firms outside the U.S. public market filed for bankruptcy protection in 2008 and early 2009 (notably Atlas, Industrial Carriers, Armada, and Sansun Logix), and South Korean firm Daewoo Logistics filed in mid-2009, banks proved generally amenable to waivers of debt covenants for U.S.-listed firms following our prediction. Owners saw interest premiums jump and dividends hampered, but very few circumstances of actual insolvency within the publicly listed dry-bulk shipping market have occurred in 2009 in the first half of 2010.
Now, ship owners are enjoying stabilized vessel values that should provide further support. After falling nearly two thirds from mid-2008 through early 2009, the average price paid for a new vessel climbed more than 20% through late 2009, and has remained relatively constant since. Because of these consistent values, we think most vessel owners will maintain solid working relations with their lenders, and are likely past the highest potential point of financial insolvency.
One exception to our assessment among our coverage universe is TOP Ships (TOPS), a small, financially-distressed owner of both dry-bulk and tanker vessels. The company is still in violation of nearly all of its debt covenants, and continues to restructure its lending agreements to delay scheduled principal payments, but we believe the firm's cash flow from locked-in ship revenue will cover remaining requirements. As such, we think the stock could be worth a look by those investors with immense risk appetites.
Conclusion
Based on our supply and demand forecasts, we believe vessel utilization will remain roughly in-balance for the near future, although we still remain concerned regarding longer-term oversupply due to the recent increased ordering activity. Rising and falling port congestion, order delays, weather, and other short-term factors could lead to periods of rapidly increasing or decreasing shipping rates, but we forecast daily pricing at or near current levels through 2011.
However, digging a little deeper, we think Capesize owners likely face the most risk. These large vessels are one of the youngest asset classes in the industry (and thus cannot fall back on ship scrapping as a buffer for downside protection), are tied almost exclusively to iron ore and coal demand, and will likely face increased competition from very large ore carriers, or VLOCs, ordered by their current customers.
We recommend that investors keep Diana Shipping (DSX) and Eagle Bulk (EGLE) on their radars due to the firms' primary concentration on smaller Panamax and Supramax vessels. While these ship classes are similarly tied to the whims of supply and demand, their rates have proven less volatile during the recent past, and niche capabilities such as on-board cranes (for smaller, less-capable ports), minor bulk and grain cargo holds, and the rapid emergence of the Chinese coastal trade could somewhat insulate results going forward.
No, Torm suspended paying dividends at end of 2009, that's
why we dropped so much in price, but I'm looking for a rebound here soon, somethings got to happen.
later
just when you think things are going good, SMACK!!!! right in the kisser
definitely worth putting back on the alert watch list, could go.
wow, we're both missing the little run up, something brewing/
this will be a sell the news deal..........jmo
last weeks report from a newsletter.......
>>>>Ocean Shipping Indices. Since the ocean freight indices are now being depressed by the arrival of numerous new ships, adding unusually large amounts of supply they are no longer reflecting changes in shipping demand. As a result, they have lost their value in forecasting global economic activity. Until there is a dramatic change in the supply situation, we are suspending the ocean shipping indices from our market review.
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http://www.ivolatility.com
looks like to me all ships are sinking....
Son of a Bitch, I almost bought some the other day, talked myself outta of it. dammit all to hell// and it was right on the chart,
wow, this one just won't quit. probably a $2 stock.
I had read once way way back that this one was in trouble
but didn't believe it. now I can see why.
stock still in the shittttter...............
not only that they expect a loss of $40 to $60 million for the year.
Tanker market better turn around soon or they may be selling the
tankers as scrap metal. I continue to watch but with much skepticism, although some of the other tankers seem to be doing better. go figure.
all the best
dfx
,,,,,$$$$
lack of interest here in TRMD land
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this stock just can't get it together/
looks like TRMD just rolling here,
might try and watch the trend develop,
shippers doing good lately.
how you been?
good trades
Stan
Boy, this TRMD is a sinking ship if I ever did see one....
sad
,,,,,$$$$$
Im thinking the 90 day ma a good target
seems reasonable
would have been worth a trade, we missed it.
looks like TRMD might be ripe for nice bounce play.
But! just when you think that, down she goes. thoughts?
safe trades
Stan
,,,,,$$$$$
looks like TORM here brewing a little, thoughts?
keep an eye on my other pick, BTN, i just bought
back 4k shares and will add again this week.
If it pushes thru $9, double digit territory
could be in the works. keep in touch.
Safe trades
Stan
,,,,,$$$$$
ditto, the last month I am up some 66%, thanks to BTN, currently
I am hedged in gold, selling covered calls, working a position in
SGG, the chart looks super for a run, bought back some BTN today.
also, using puts to take advantage of weakness in the Euro and Aussie.
WOW, this stock just gets trashed everyday now.......
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