1/
I know I spam twitter with bullish tweets about #drybulk. There's a reason why I'm pounding table on this one. This might be the only(!) chance you will get in your life time to participate in a mega cycle. Remember, it's 18 years since the last one started.
I know I spam twitter with bullish tweets about #drybulk. There's a reason why I'm pounding table on this one. This might be the only(!) chance you will get in your life time to participate in a mega cycle. Remember, it's 18 years since the last one started.
2/
Let's start with the demand side.
There's two drivers of demand. Demand for the commodity and supply of the commodity. Infinite demand for iron ore doesn't help if there's no supply to put on ships. But they are connected. ---
Let's start with the demand side.
There's two drivers of demand. Demand for the commodity and supply of the commodity. Infinite demand for iron ore doesn't help if there's no supply to put on ships. But they are connected. ---
3/
Increased demand for the commodity leads to higher prices, incentivising increased production.
Will soybean producers be likely to increase production and shipments going forward?
Increased demand for the commodity leads to higher prices, incentivising increased production.
Will soybean producers be likely to increase production and shipments going forward?
4/
Will iron ore producers increase production at these levels when their break even are $25-40/t
Will iron ore producers increase production at these levels when their break even are $25-40/t
5/
Demand for commodities are there, the prices are telling us so. We just need global producers to increase production. This is happening as we speak.
Demand for commodities are there, the prices are telling us so. We just need global producers to increase production. This is happening as we speak.
6/
Demand starts a cycle, supply kills it!
It seems to be common knowledge that the financial crisis in 2008-09 ended the bull cycle in dry bulk. What many seem to forget is this happened during a time of insane supply increases.
Demand starts a cycle, supply kills it!
It seems to be common knowledge that the financial crisis in 2008-09 ended the bull cycle in dry bulk. What many seem to forget is this happened during a time of insane supply increases.
7/
The #drybulk market didn't just crash because some strippers in Florida was long 4 condos. It crashed because the fleet expanded with around 20% annually for 3 years straight!
The #drybulk market didn't just crash because some strippers in Florida was long 4 condos. It crashed because the fleet expanded with around 20% annually for 3 years straight!
8/
Current order book is at lowest level ever. Last time it was close to these levels was in 2002, the time when the last super cycle started.
Order book:
Capesize 7,5%
Panamax 6,5%
Handy 3,5%
Current order book is at lowest level ever. Last time it was close to these levels was in 2002, the time when the last super cycle started.
Order book:
Capesize 7,5%
Panamax 6,5%
Handy 3,5%
We could actually end up in a situation where supply decreases in 2023, due to speed limitations.
9/
Conclusion:
- Demand for commodities is increasing.
- Supply of commodities will increase.
- Order book is record low.
- EEXI and other regulations will have the potential to
decrease supply during a strong market.
Conclusion:
- Demand for commodities is increasing.
- Supply of commodities will increase.
- Order book is record low.
- EEXI and other regulations will have the potential to
decrease supply during a strong market.
10/
#permabears stay poor and #permabulls end up poor.
Shipping is timing, and I've never seen a better set up for a mega cycle.
#irresponsiblylong
#permabears stay poor and #permabulls end up poor.
Shipping is timing, and I've never seen a better set up for a mega cycle.
#irresponsiblylong
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