Call of the Month: Commodore Research & Consultancy

During August,  the 66% lift in the Capesize market was preceded by a market call made by Jeffrey Landsberg and his team at Commodore.

commodore research

The New York based consultancy that focuses on the global demand, supply, and seaborne trade of industrial and agricultural commodities did their exposé on Bloomberg, (the cargo imbalance scenario) with references on Vale and Rio and with a particular focus on China.

bloomber screenshot commodore

It was well done; dry was under looked and rates were severely depressed.

Is it physical or only something in the paper market based on sentiment ? The answer will be revealed to us during Q4 14 and Q1 2015.

Monthly return of the Commodore’s Call of the Month in the FFA trade:

before after commodore's call in the Paper market

In the Physical market, Barry Parker in his last Capital Link Shipping Market Report reported that for the second-end of August, Capesize hires moved up over $17,000/day, money-making territory for owners.

One shorter term period charter, for 7 – 9 months duration, was booked by Rio Tinto Marine, at $23,500/day. It was rich, it seems to be  more than Q4 and Q1 monthly average equivalent.

Parker also added that Physical market “operators” like Rio who typically engage in such charters, on real vessels, are clearly very cautious. If I may add, the call made by Commodore may have also caught a complacent commodity charterer in a costly position !

One curious move in the Capesize remains this fixture  at near $20,000/day by Cargill reported on Tradewinds.

Commodities

Both the Coal, Iron Ore, Steel and Scaps depressed at multi-years low.

In a market-driven economy, low-prices increase demand.

The entire Contract-to-Cash cycle with China is slower (not just marketing but also working with banks for credit and customers to ensure Letters of Credit (LC’s) are accurate and opened prior to vessel arrival…)

Because China is the hybrid type of economic system ( at midway between central-planning and the market-driven economy), I’d like to see some improvements in the last element before jumping into the big cargo scenario.

A major remark is also about the supply side and concerns about scrapping figures in the current shipping cycle.

Some will say that in Shipping, Cape Q4 14 is already pricing a chinese re-stocking (market-driven or by stimulus).

If the fleet wasn’t gigantic, Owners would be normally able “to hoard” tonnage on these forward expectations.

Now, Owners are likely to use the “peaks” to better lock period leases to survive the rogue waves.

The Trade Shipping and Finance Wizard © 2014

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