RSS Feed

Jonathan Chappell on Tankers

Jonathan Chappell at Evercore issued a note yesterday on the tanker sector.  Summary of first paragraph as follows:

The summer tanker environment was brutal across the board, with the rate weakness expected to be on full display in 3Q16 earnings results. However, rates have improved dramatically (and seasonally) in many segments as 4Q is underway, and although we still forecast unfavorable comparisons for all crude (but not product) tanker asset classes through next year, it still appears that the worst of the seasonal swoon is in the rear view mirror. The same cannot be said for tanker stock sentiment as new concerns about tanker demand amid a potential OPEC production cut adds to the fears of overcapacity through 2017. We understand the reluctance to be early on the crude tanker stocks, yet …

…We acknowledge that the upcoming weeks will be choppy at best with terrible 3Q results, including losses at many companies, but we believe investors should look through the seasonal softness for product tankers and begin to focus on an improving fundamental outlook for 2017. Buy-rated ASC and STNG remain our top picks for the next 3-6 months based on this backdrop.


$DSX - Diana Shipping

DSX - Diana Shipping 
 2016-10-18 10:25 AM
Diana has been making some tentative upward moves, although we have 
seen some wandering between various price supports since June. Presently 
the 2.40 - 2.50 region is showing signs of support, but weakness could show itself 
Any pushes down through 2.40 may prove the weakness theory. 


Scorpio Bulkers - $SALT

2016-10-17 10:47 AM
Back in July we spoke of possible bullishness in SALT. Since then we’ve seen tentative, but steady, climbing of the stair case, with some heavy testing of support points. There appears to be a building of price support in the 3.70 area, and this may lead to a more solid consolidation. So far, so good.


Previous mumblings on SALT:

2016-07-09 10:55 AM

Scorpio Bulkers - SALT: As the week closes, SALT has maintained its steadiness, perhaps even knocking on the ceiling around 3.15 over the past few days. Any building into the 3.00 / 3.50 range could prove slightly bullish.


Ben Nolan at Stifel on Dry Bulk and Coal

Coal is in global structural decline losing share to natural gas and renewables. This is bad news for dry bulk shipping where the combination of thermal and coking coal make up about a quarter of all dry bulk trade. Developed economies in areas like Europe, Japan, and Korea continue to be a problem as consumption shrinks, but developing economies in Asia have been largely making up for those declines. Through August Chinese coal consumption for power generation was up 8.7% yoy. Also, this week India announced it will likely miss coal output target for self-sufficiency with the country remaining in a coal deficit until 2020, although the deficit will narrow from 191 million tons in 2016 to 163 million tons by 2020. Coking coal remains an issue, on the back of tepid steel consumption growth. However, if global seaborne coal trade which fell by 6.5% in 2015 were to be flat to only down less than 1% in 2016 through 2018, at the same time annual iron ore trade could grow 3-4% due to the switching of domestic mines to imports from Australia and Brazil, global dry bulk trade could grow by 2-3% per year. While not strong enough to drive anything but a mild demand led recovery, should net fleet growth shrink in 2017, it is possible the such as tame recovery could take place by late 2017 or early 2018.


Dry Bulk

Cape index was down a touch - and still sits at about $12,000. Nov/Dec got some good support today, adding a few hundred points to the 9700 level.


Dry Bulk FFAs - Cape index down $1,000

Tone:  Rumoured better physical sparked some fresh buying on nearby capes with Oct/Nov and q4 all trading at the highs (11700/10400/10150) at the close.  Panamax and smax seeing good support although sellers present at last done.

Capes Index $12136: Oct 11650 +400 -200/day Nov 10400 +500 +200/day Dec 8200 +200 unch/day Q4 10150 +450 +150/day Q1 4650 unch -50/days Cal17 7750 +100 +50h/day Cal18 9050 unch unch/day Cal19 10350 unch unch/day

Panamax Index $6327: Oct 6450 unch +150/day Nov 7100 unch +150/day Dec 6600 +50 +200/day Q4 6700 unch +150/day Q1 5050 +50 +100/day Cal17 6050 unch +100/day Cal18 6900 unch +50/day Cal19 7400 unch +50/day

Smax Index $7034:Oct 7250 -100 unch/day Nov 7550 unch +100/day Dec 7350 unch +250/day Q4 7400 -500 +150/day Q1 5350 -50 +150/day Cal17 6300 -50 +100/day Cal18 7150 unch +100/day Cal19 7500 unch unch/day



We haven’t reported on LPG rates in a while mainly because - there has been nothing to report.  Well - there is still nothing to report - but we felt the need to at least have an LPG post.

Rates are currently in the $10-20k/day range, depending on the voyage - with maybe a global average earnings of about $13k/day.  For home gamers - this is just about opex level on these ships - so anyone who owes money to the banks is below break even.


Tankers - Magnus Fyhr at SGS

Magns issued a note this morning, “Tanker update - reducing EPS estimates on spot market weakness”.

He maintains following ratings:


Neutral: FRO NAT

Lowers price targets on:

TNP - to $7.50 from 8.00
DHT - to $6.00 from 6.50 


Dry Bulk FFAs

Tone: Afternoon session not much different than morning…supported but little to no volume on all fronts

Capes Index $14013: Oct 12900 unch +200/day Nov 10900 -100 +100/day Q4 10800 -50 +100/day Q1 4750 unch +50/day Cal17 7850 +50 +50/day Cal18 9200 unch unch/day Cal19 10500 unch unch/day

Panamax Index $5839: Oct 6250 -100 unch/day Nov 7000 +100 +150/day Q4 6550 unch +100/day Q1 4950 unch unch/day Cal17 5950 unch unch/day Cal18 6850 unch unch/day Cal19 7350 unch unch/day

Smax Index $7076:Oct 7250 -50 -50/day Nov 7250 -50 -50/day Q4 7100 -100 -100/day Q1 5150 unch unch/day Cal17 6150 -50 -50/day Cal18 7000 unch/day  Cal19 7500 unch unch/day



$EURN - Euronav NV

EURN Euronav
2016-10-09 8:27 PM
Some technical hints around the Sep 29/Oct 3 weekend proved out over the course of
last week. By Thursday, the run upwards in the EURN stock price was a good attempt at the 8.50 mark we     were eyeing.
However, a little softness in the price was seen by Friday. There may be some upward steam left in this move, although this may be a chance to build a region of price support instead. Just in case, once again we have our eye on 8.50 given recent strength.