FOREX TRADERS

[Jester_Vandalay]

May NOT be a blessing for the other shipping companies


I've been watching Genco Shipping & Trading Limited (Public, NYSE:GNK)for the last few months.

“There’s no doubt it’s going to be bearish,” said Stuart Rae, joint managing director of M2M Management Ltd., a London- based hedge-fund group that operates about 65 commodity transporters and trades freight derivatives. “It’s going to exacerbate a market that was already squirming.”

Queensland exports about 180 million metric tons of coal a year, or about a fifth of the global total, according to Sverre Bjorn Svenning, an analyst at Fearnley Consultants A/S in Oslo. The dry-bulk fleet expanded by 17 percent last year, outpacing an 11 percent increase in haulage demand, according to the research unit of Clarkson Plc, the world’s biggest shipbroker.

$18,697 a Day

So-called capesize vessels, the largest tracked by the Baltic Exchange, led declines today as daily rental rates slid 6.6 percent to $18,697. Costs fell 2.7 percent to $14,312 for panamaxes, lost 4.8 percent to $14,860 for supramaxes, and declined 2.9 percent to $11,805 for handysizes.


Total seaborne trade in dry-bulk cargoes, spanning commodities including coal, iron ore and grains, totaled 3.3 billion tons last year, London-based Clarkson estimates.

Queensland coal buyers already invoked force majeure, a legal clause giving them the right to cancel charters, according to Rae. The release of ships from charters will increase competition among owners for cargoes, he said.

Producers of power-station coal in Indonesia and South Africa are unlikely to have time to increase their output, potentially generating alternative vessel demand, because the Queensland disruption probably will be too short, according to Svenning at Fearnley.

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