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AllThingsVentured Profile picture
@AllVentured
May 4, 2022 • 5 tweets • 3 min read • Read on X
Scrolly
Updated global fleet age and replacement requirements courtesy of the latest Danish Ship Finance report.

We are going to be hearing a lot more about negative fleet growth in #tankers and #drybulk in the coming years. Strap in for higher rates 🚀
Shipbuilding capacity still decreasing. Many second tier yards are unable to build the modern designs and sizes required. 129 second tier yards that delivered a ship in 2021 *did not receive any new orders in 2021*. These yards will most likely cease to exist in coming years.
Drybulk fleet detail. Orderbook to fleet acutely low in small sizes.
Crude tankers:
Product tankers. By far the lowest orderbook at just 4% of fleet. Compare this to today's earnings of $40k per day and DSF calling for 19% demand growth between 2022 and 2023. Just WOW.

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More from @AllVentured

AllThingsVentured Profile picture
May 19
I remember in fall 2023 when the unemployment rate first spiked 40bps nearly triggering Sahm rule, delinquencies started to go parabolic, student loans were supposed to go into repayment (before 2 more years of Biden can kicking) someone said that equities couldn't go lower when EVERYONE was bearish. This turned out to be the correct take. Markets went higher -> wealth effect -> reflexive economic strength along with fiscal can kicking heroics by Yellen and the Biden Admin to get through the election.

At the time, I tried to imagine a scenario where everyone was bullish DESPITE an incredibly bearish backdrop and couldn't. But here we are.

Read the comments on any bearish data or bearish takes today. Lots of "markets only go up". No rationale other than technicals and markets usually go up.

Sure the soft data hasn't been a reliable indicator in recent years but the hard data is starting to roll but nobody cares because "markets go up". And nobody is looking forward - the headwinds to the hard data are massive and obvious.

The response to a confluence of bearish factors is always "Fiscal dominance" or "Trump will jawbone the market up" or "who cares chart says up". Nothing like price to drive sentiment.

I'm personally exhausted. I'm starting to be concerned that the degens might actually be right and we go straight to Zimbabwe without the global margin call step.

At the same time my own feelings tell me we might be near that moment where positioning is back offsides and we are due for a mean reversion.

Logic tells me to stay the course - The bearish case is far clearer than it was in 2022 or anytime since yet sentiment is the most dislocated from reality today. And although I have always thought we would get the global margin call before the Zimbabwe, the fact that the Fed is not cooperating gives me more conviction that the Fed will require things to get MUCH worse before taking action to enable the Zimbabwe regime to begin.

I can only hope that the regime shift from margin call to Zimbabwe will be obvious when all is said and done and I can nail the turn from net short to levered long. Probably naive to think I can nail the path but this feels like the juice is worth the squeeze. GLTA.
Absolutely insane.
Record buying on multiple tape bomb day with worst leading indicators since a handful of banks failed.
Read 12 tweets
AllThingsVentured Profile picture
Mar 21
Shipping cheat codes:

In a shipping bull market, you want to own big ships.

In a shipping bear market, don't own shipping.

In neither scenario should you own small tankers.
Large crude tankers fetch much higher rates and margins in a tight market and fall back to the same near breakeven levels in a bear market.

Hydrocarbon trades (regardless of clean/dirty) are super fungible over any time period more than the next couple months. If profits in one size get out of whack, the WILL be quickly cannibalized by other ship sizes into a more typical $/ton distribution.

Read 4 tweets
AllThingsVentured Profile picture
Mar 19
1/ FINALLY some good data on US port calls vs Chinese fleet proportion regarding the proposed Chinese ship fees.

🧵TLDR: Most shipping trades will easily find non-Chinese tonnage to call US ports to avoid the fees

h/t Omar/Jefferies the first reasonable take vs the hysterics Image
2/ Here are the ratios of non-Chinese fleet to US share of global trade to show how many times over US trade is covered for each segment by the non-Chinese fleet:

Drybulk - .5/.075 = 6.7x
LNG - .9/.2 = 4.5x
Boxships - .6/.15 = 4x
Tankers - .7/.18 = 3.9x
LPG - .85/.45 = 1.9x
3/ Thats not to say there won't be disruption and extra costs. THERE WILL BE. Just not nearly to the hysterical estimates I keep seeing from shipping analysts and the liner company CEOs talking their book and threatening huge reductions in port calls. Not going to happen.
Read 13 tweets
AllThingsVentured Profile picture
Dec 5, 2024
The main reason #tanker rates and equities have sold off from their June highs?

➡️Huge global inventory drawdowns⬅️

The 150mm bbl drawdown since early June represents 30 VLCC equivalents that went unemployed vs a flat inventory counterfactual.

thread 🧵
2/ With inventories at bottom of 5 year averages, it seems unlikely that inventories decline meaningfully from here. Just returning to flat inventories adds back the +30 VLCCs of demand. Adding the expected 1mm b/d supply/demand growth in 2025 requires another +30 VLCCs.
3/ Therefore my base case for 2025 sees +60 VLCC equivalents employed vs levels seen since June.

This is vs a fleet of ~900 VLCCS so +7% utilization relative to recent months.
Read 8 tweets
AllThingsVentured Profile picture
Oct 8, 2024
1/ Buried under all of the Middle East and port strike chaos headlines, a very important debate about a carbon tax on shipping is ongoing at IMO meetings this week.

ft.com/content/407307…
2/ Support for a carbon tax is gathering momentum as it would be one of the most simple, economic, and effective ways to lower carbon emissions in the shipping industry. On the other side of the debate are middle income countries responsible for the lion's share of world trade
3/ These major exporters oppose it because it will increase the cost of traded goods which is partially borne by the producer and partially borne by the consumer. Image
Read 8 tweets
AllThingsVentured Profile picture
Feb 23, 2024
🚨 Breaking 🚨

Biden Admin sanctions 147 vessel Sovcomflot fleet as foretold in the below thread.

A nice gift on a Friday. If history is a guide and we can use COSCO sanctions as a proxy, Tanker longs should do exceptionally well next week.
Image
These sanctions actually DO work.

What few vessels the US has sanctioned due to Russian oil prior to Sovcomflot have been mostly stranded due to the sanctions.
Image
Image
I never trade after hours but felt compelled to today. Picked up a good chunk of $IMPP (had already been buying this dip earlier this week) and $TNK at fair prices. Tried for some $TNP as well but only got a bit.

I count 42x aframax and 15x suezmax in the sovcomflot fleet. If all of these are sidelined, I expect midsize rates to benefit the most which is why I bought the above. $NAT also a good option but already bid up much higher after hours.
Read 5 tweets

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