‘Shipshape 10 List’, a list of news and articles published in the current week that a senior executive in shipping, shipping finance, commodities, energy, supply chain and infrastructure should had noticed; news and articles that are shaping the agenda and the course of the maritime industry.
Sometimes seemingly tangential, sometimes humorous, occasionally sarcastic, but always insightful and topical.
And, this week’s ‘Shipshape 10’:
While most of the past week has been consumed by stipulations on what a Trump administration would mean for the shipping industry,
1. Varsler shippinghavari (from Dagens Næringsliv),
and whether a y-u-g-e infrastructure stimulus package may be what the dry bulk market needed, shipping shares for a couple of days behaved as in the good old days of 2008, almost a lifetime ago:
2. Unmoored From Reality: DryShips Halted After 1,500% Post-Election Rally (from the Wall Street Journal)
3. What to Do With a Stock Up 1,000% in One Week? (from Barron’s)
Nothing fundamental actually besides distorted markets and covering ‘short squeeze’, but impressive and nostalgic headlines nevertheless, we have to admit; for real life headlines, another shipping enterprise sponsored by an iconic name of the shipping universe has been making headlines that more accurately reflect reality:
4. Rickmers Maritime says unable to show it will remain in business (from the Straits Times)
Dry bulk freight rates have improved a lot in the last month, and the BDI is up almost four-fold since its bottom in February 2016; really an impressive performance, but is this a sign that the market is turning around and that the present rally is not just another seasonal improvement? Time will tell, but it’s worth mentioning that the Chinese currency is presently at eight-year low, and given than storage costs for commodities such as iron ore and coal is low, probably it makes sense to hold onto commodities than unto fiat money, especially with all the political uncertainty worldwide:
5. Yuan Slides to Lowest Level in Nearly Eight Years (from The Wall Street Journal)
While new trading outposts are established even at remote corners of our planet:
6. As Trump talks wall, China builds bridges to Latin America (from the Associated Press),
7. Pakistani PM welcomes first large Chinese shipment to Gwadar port (from Reuters)
If marine engines is a sign for the shipping industry’s direction, Rolls-Royce’s announcement for the week gives additional color on market recovery:
8. Rolls-Royce May Close More Marine Sites as Cost Cuts Deepen (from Bloomberg)
A major piece of news that will be affecting the tanker market (crude and gas) and the Jones Act market for decades to come, there has been another tremendous discovery of another field in Texas, further solidifying the state’s nickname as the ‘Texarabia’ of the US:
9. Vast shale oil field in Texas could yield 20 billion barrels (from the Associated Press)
In the interim, another government is bowing to pressure and committing $1.9 billion dollars to help domestic shipping companies, this time in Taiwan; as a quick reminder for those with short memory, just two weeks ago, the S Korean government had allocated $9.6 billion to assist the local shipping industry (shipbuilders and shipping companies). After almost two decades in the shipping industry, we got to appreciate the industry from a special point of view: most of the vessels in the world fly ‘open registry flags’ and pay tax on tonnage (but not on income); for the few shipping companies that pay tax, it seems they get the extra option of getting bailed out when times are bad.
10. Taiwan Approves $1.9 Billion Aid Package to Troubled Shipping Companies (from the Wall Street Journal Logistics Report)
And, our bonus feature, a few editorial thoughts “What Will Save The Shipping Industry? Nine Industry Thought Leaders Weigh In” (from #Shipping2030)
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