feed the sparrow

Did you notice, BHSI went up by 66% in the last 6 months. Ok 6 months ago BHSI was recovering after the deadfull spring we have been through in 2016. But still 66% remains a nice number. Atlantic remains the key market driver here. USG demand still fairly strong, reported today in the Baltic Dry Index mv ’Gea’ 2005 built 33’562 dwt dely Casablanca 05/07 Dec trip via US Gulf redel Puerto Quetzal done @ $9,500 daily by Oldendorff, this shall be somehow a 45/50 days voyage which to be compared to « in the 10’500/11’000usd region » for a 30 days trip from continent to West Africa.

Oldendorff, the guys who have more than 600 ships under their control, they could not find a suitable candidate within their books for this one ? pfiou market is on fire. At least this is what’s BMTI saying today about atlantic activity. Sure, if the USG still needs ballasters from Continent, the Christmas truce, which might be expected ex Continent/Baltic from charterers being bit fed up to be squeezed, might not come soon.  all in all, quite a lot of cargoes around (not much grains) eventhough seeing fresh today Rouen/1 Libya (intention west ports) 25.000 10% in OO barley sf abt 54′ 7000/2500 18-23 December. Taking into account level done on the wheat ex Rouen to Algeria lately, this stem to Libya shall theorically be worth something in the US $25/26 pmt range. However, Libya, worth to be bit cautious and remain not too picky from charterers side, get an offer and book it would be my advise to charterers.

Checking some of the fixtures reported daily, market might be on fire, however this really depends on where the ships are trading :

  • 57kdwat trading in the East being worth US $ 6’000 while comparable vessel is worth Us$ 20’750 for 2/3 ll ex USG
  • 33kdwat trading in the PG is worth US$ 5’100 daily while comparable vessel ex Blsea to Egypt med is worth US$ 10’400

 

What else ?

Ask shipping people what they love about shipping industry and you’ll get 9 times of of 10 the same reply « Shipping is great, because everyday you learn something new ». So time for you to wonder what you’ve learn today. Me ? what’s my today’s learning ?

Well I’m not ashamed to disclose and admit, I just understood today the concept and definition of « market volatility ». I just understood is not only an unpredictable market such like:

  • going up and down,
  • North to South via East and West,
  • Going litterally in every direction

like a brainless sparrow, without any chance to surely predict what is likely to be path and where will be the landing area.

Yes, until today I thought the above was the only valid definition for volatility. Until I read BMTI this morning and the light came here. BMTI is measuring Index volatily by stating the degree of variation of the figures (let’s say the amplitude) between the minimum and the maximum seen through the last 12 months.

So when people are talking about Capers volatility do they mean in the sense of very high difference in between the min and the max in the last 12 months, namely 2’591 units (when the highest of the year was at 2’752 ! and when on the opposite Handies volatility is only at 369units) or do they talk about capers market volatility because the capers are like (huge) sparrowes flying over with absolute nobody having a clue where/when/how they will land ? When on the other side Handies are the wise, quiet predictable ladies ?

I would have understood nothing I would have summarized by saying : « when a cargo is mentionned 30’000 10pct more or less, the volatility of this stem is 6’000mt which is the result of 33’000mt minus 27’000mt. As you can see shipping is really impressive what we call volatility on the money is called tolerance on the physical cargo and I’m not mathematician.

I have another theory and definition about « market volatility ». To me, this word was invented by market specialists to avoid declaring the disgraceful statement « I don’t know and I have no clue ». Sure, when your Million dollars chartering Director is telling you « be aware and careful of market volatility », you know why you paid him so well. If he would have dared to tell you « I don’t know, I have no clue ». Not sure you would have promoted him during the last yearly appraisal.

To conclude today’s theory on volatility, let’s take back a look on the NASDAQ DRYS stock exchange level. Remember on 18th november I was mentionning you :

“With the example of Dryships movement on the stock market (NASDAQ)

  • On 9th nov value for 1 share  at US$ 5.10
  • On 11th nov value for 1 share at US$ 13.60
  • On 14th nov value for 1 share at US$ 42.86
  • On 15th nov value for 1 share at US$ 73.00
  • On 17th nov value for 1 share at US$ 11.00″

So, where is it now ?

  • On 6th dec value for 1 share at US$ 4.64

So

  • according to BMTI definition, the Volatility is at US $68.36,
  • According to stock exchanges the time for buying DRYS share is over,
  • According to the bankers, the threshold for losing money tolerance is over

Have a nice day and in case you have not managed to learn anything yet, then please read again the above, there is surely something you did not know, and in case you learned something great from your side, please feed the sparrow (ie me) I’ll be delighted to learn something from you.

Regards

Jerome

 

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