|TANKER ECONOMICS: FFA JANUARY 2012|
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This is a SAMPLE of our analytics- please contact firstname.lastname@example.org to discuss a particular situation
end 2014- market is hot, call us for our thoughts
SAMPLE: Jan. 2012 Tanker Market FFAs: Dickens Would Not Like These ExpectationsA peculiar structure in the forward curves for the larger (VLCC) tanker sizes was brought about by the spot tanker rally during January, where the barometer TD3 route (AG/ Japan) averaged WS 57 (or a TCE of about $22,000/day). The sharp spike in the nearby position, caused by a mid January chartering rush in advance of Asian holidays, was counterbalanced by the dismal, outlook moving forward- an outlook that was improved compared to year end 2011. In the forward curves, the TCE’s, imputed from WS rates, worked back to hires in the region of $12,000/day to nearly $14,000/day out through 2013. Expectations for the traditionally strong Winter season, in 2012- 2013, show a small upward blip, to imputed TCE’s exceeding $14,000/day. <>
Confirmation over a
multi-month time span will be required, in order to properly label any
positive change in sentiment. Such a nascent change- if real,
can be seen from a comparison of month end with the beginning of
the Calendar 2013 Imarex assessment was WS
$10,900/day. After Asian traders returned to their desks, the Calendar
rate was assessed by Imarex at WS 41.8, or
$13,800/day (based on likely fuel prices). Even with the improvement, a
hire at this level is not sustainable; operating costs alone on a VLCC
roughly $10,000/day. Daily TC breakevens of between $25,000/day and
are derived by adding a component that reflects the capital costs,
typically $15,000/day to $20,000.day,
which would be
added to the tanker operating costs.
estimated one year timecharters for modern
VLCCs at around $17,000/day (one year
duration) - $23,000/day
(three years), indicative of hires that might be agreed by the lowest
cost operator, one of benefits from a low capital cost component. The Imarex computation of 2012 “calendar” hire, at
TCE, really more of an averaging of non bids and offers reflecting cost
recovery, is at
a very substantial discount to the one year TC estimate. >
OUR EMPHASIS : CASH FLOW IS KING
-EXPERT WITNESS and litigation support for lawyers (was the ship really earning $44,000 per day?). We have assisted, as expert witness, in the valuation of both assets and freight markets at particular points in time.
-Freight market analysis for
investment bankers (example: what is the market contour for product
tankers in offshore trades?). Such earnings scenarios can then be input
into both asset and company valuations.
Barry Parker's articles on topics such as ship
finance, hedging strategies, and even
"residual value futures" and ways
to protect ship values, have been published widely. His work has
supported the closing of numerous shipping transactions, the smooth
running of maritime businesses and the forensic investigation into the
arcane world of cash flows for maritime companies.
We are called upon to develop freight and energy hedging strategies (as discussed in a separate page), and engineer and reverse engineer financial packages for shipping (tanker, drybulk, container, gas carriers). We have worked on financial modelling in connection with capital raises for both public and private markets.
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