Ton Mile Trader

The Alpha Male Network: A pretty solid drubbing across the board. The softening AG rate atmosphere may have led to the initial slide – and the broader stock market took over from there. With earnings announcements right around the corner – “nimble” buying and selling will be required to capture the best of this sector. Keep an eye on the NAT dividend, as it could provide some upside to this name. RAMS is another story – though so far, the apocalypse has not occurred – so the charitable trust remains long but less than strong.
Dry Bulk : The dry collapse wasn’t completely unpredictable since the run up on the prior day made absolutely no sense. The broad market sell-off only added to the misery. We would love to report that TBSI should bounce back after its 10% debacle – but we have all seen these movies before. While some form of mean reversion is possible – so is more pain. Keep that in mind.
Asia : Asian stocks finished mixed today. Korea Line saw the biggest gain (+4.1%), while Shanghai-listed shares of Cosco (-3%) went the other route. Over the last three months, Asian dry bulk equities are down by an average of 15%.

In ratings news…

- Greg Lewis maintains his NEUTRAL rating on RAMS , though he cuts price target to $7 (from $9). He estimates NAV at $8.50/share - though believes a 20% discount to this number is called for.

- Natasha Boyden maintains a BUY on KEX and raises price target to $67 (from $69) citing positive outlook on the inland tank barge segment.

- Alex Brand at Stephens maintains his EQUALWEIGHT on KEX ($57), citing solid fundamentals for 2008.
- Henrik With maintains a HOLD on Wilh Wilhelmsen (NOK 195).

Anyone interested in the LPG sector should note below from Henrik With at DNB:

· Although we had expected LPG shipping rates would rise in 2Q/3Q, the earnings development has been much stronger than anticipated

· In addition to elevated transportation volumes, an overall negative effective fleet growth so far this year has supported the market

· A massive delivery schedule of new vessels for the remainder of the year and in 2009 should however cap rate levels going forward

· We hence keep our muted outlook for LPG shipping in 2008-2009, with rates likely to remain highly volatile

· Despite our significant earnings revisions, many stocks in this segment are still not attractively priced in our view

· We still favour companies exposed to smaller vessel classes, and our top picks thus remain IM Skaugen and Camillo Eitzen

Dry Bulk
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BDI      8637          down 134
BCI      13417        down 162
BPI       7754        down 215
BSI       5155        down 70
BHSI    2642          down 1

Though we occasionally see reports commenting that the bottom might be at hand and that Owners confidence might soon return, rates continue to come off. The Panamax sector has been the recipient of most of the vitriol.

Comments below from the roving Commodore:

The Colombia coal miner's strike is over. This news hasn't helped the Panamax physical market, and charterers here (Asia) still expect freight levels to come down and think a rebound is "impossible" until mid- August. That's a pretty bold statement but apparently there is a ton of spot tonnage available. Supramaxes are being hurt by the oil spill / cargo disruption in the Mississippi River. Rates are coming down and will likely continue to fall for at least the next few days.
All eyes are on China / Olympics. The skies in Beijing are still smoggy as hell, expectations point to a slowdown in industrial production, but no indication yet of any significant reduction in iron ore imports. The Chinese are good at always keeping us guessing. One important thing to point out: even if short-term sentiment is a bit iffy, medium-term sentiment is really good considering the period activity we've been seeing. Interesting side note: for the most part, there's a general consensus that dry bulk rates will trend sideways / fall for the Olympics, then rebounded significantly in the fourth quarter and approach record freight levels by the end of the year.

The interesting (and scary) thing is that pretty much everyone is saying this. Kinda makes you think. At least makes me think / wonder how we can all be right. Dry bulk doesn't normally throw fast balls right down the middle. Usually it's the curve ball hitters that excel in this market.

FFA s

Contract    Close       Current         Diff
======================================
BDI July        9000         9000         flat
BDI Q3         9025          9025         -25
BDI Q4          9225         9200         -25

CS4 Q3           $158,744       $156,750      - $1,994
CS4 Cal 09     $128,406       $128,000      - $406
PM4 Q3            $68,850       $68,250           - $600
PM4 Cal 09      $61,581       $61,625           flat
SM6 Q3            $55,013        $54,000          - $1,013

Asian stocks finished mixed today.  Korea Line saw the biggest gain (+4.1%), while Shanghai-listed shares of Cosco (-3%) went the other route.  Over the last three months, Asian dry bulk equities are down by an average of 15%.

Clean Tanker FFA Summary:

TC4 (MR SG-JP 30KT) Paper traded lower as the steam came out of the LR market. Aug was given at 286, 284 and later 282 and left offers in the low 80’s looking for bids. Q4 gave way from early bidding at 272 to 268 at 274 by days end.

TC5 (LR1 AG-JP 55KT) spot maintained w315, however reports of late Aug LR1 fiixtures made the current high value appear unsustainable. Aug paper was given from 305 down to 300 and left offers at 295. Sep traded 286, 285 & 284 and also offered for more. Q4 tested a 266 buyer who backed off and left 266 offered at day’s end. Q1 worked 185 at 190 through most of the move, relatively unaffected bu the front movement.

TC2 (MR ARA-NY 37KT) spot continues lower with another 5 pts slip to w231. Aug swaps were better off though as NYMEX gasoline bounced off the lows and made arb possibilities more workable. The RBOB minus NWE non-oxy closed at $36.35/mt and Aug paper responded with improved trading levels, as high as 255 then ending either side of 250. W250 means $25.50/mt equivalent. Sep paper likewise improved with trades at 257 and a closing range of 257 at 261. Q4 saw buying interest for the first time in a few days and left 260 at 265 after 262 was heard lifted.

Physical market talking levels:

· MR : MR Sing/ Jpn easing off slightly, estimate W295 -W300, AG rates ease off slightly as well and north activities appear to have slowed down. Last heard was the Petro Venus on subs 11/Aug Blang Lancing /Yeosu GS Caltex w290

· LR1 : W310 – W315 lvl, hearing quite a few vsls on subs, however not many details. Last heard was the Frontier express on subs internally to M-beni rumour lvl of W315 and the Summit Europe 55 nap AG/ east W3121.5 on subs to Shell.

· LR2 : W310 lvl last heard Torm Mariann on subs for long haul but no details.

Reported fixtures: