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07-21-07-28

Tuesday, January 12, 2016

The Cascade Of Deflation -Asian Shipyard Demand Collapsing
By The Edge Markets

SINGAPORE (Jan 12): The weakening yuan and China s waning appetite for raw materials have come around to bite the country s shipbuilders, raising the odds that more shipyards will soon be shuttered. About 140 yards in the world s second-biggest shipbuilding nation have gone out of business since 2010, and more are expected to close in the next two years after only 69 won orders for vessels last year, JPMorgan Chase & Co.analysts Sokje Lee and Minsung Lee wrote in a Jan 6 report. That compares with 126 shipyards that fielded orders in 2014 and 147 in 2013. Total orders at Chinese shipyards tumbled 59% in the first 11 months of 2015, according to data released Dec. 15 by the China Association of the National Shipbuilding Industry. Builders have sought government support as excess vessel capacity drives down shipping rates and prompts customers to cancel contracts. Zhoushan Wuzhou Ship Repairing & Building Co. last month became the first state-owned shipbuilder to go bankrupt in a decade.

The chance of orders being canceled at Chinese yards is becoming greater and greater, said Park Moo Hyun, an analyst at Hana Daetoo Securities Co. in Seoul. While a weaker yuan could mean cheaper ship prices for customers, it still won t be enough to lure back any buyers. Chinese shipbuilders won t be able to revive even if you try breathing some life into them.

The Baltic Dry Index, which measures the cost of transporting raw materials, dropped 39% last year and hit a historical low Dec 16. Aggravating the situation is Chinese shipyards heavy reliance on bulk carriers, which are used to haul commodities from iron ore to coal and grain. Bulk ships accounted for 41.6% of Chinese shipyards US$26.6 billion ($38.2 billion) orderbook as of Dec. 1, according to Clarkson Plc, the world s largest shipbroker. That compares with a 3.5% share at South Korean shipyards, which have more exposure to the tankers and gas carriers that are among the few bright spots in a beleaguered shipping industry. Cosco Corp. (Valuation: 1.20, Fundamental: 0.35) Singapore, which is owned by a Chinese parent company and has its shipyards on the mainland, and Yangzijiang Shipbuilding Holdings (Valuation: 2.40, Fundamental: 2.20) saw some bulk-carrier orders canceled last year.


http://davidstockmanscontracorner.com/the-cascade-of-deflation-asian-shipyard-demand-collapsing/[1]


Abenomics At Work -Japanese Stocks Fall 6th Straight Day, Down 9.4% YTD
By Anna Kitanaka & Toshiro Hasegawa at Bloomberg

Japanese stocks fell for a sixth day, capping the worst start to a year on record, as markets reopened after a public holiday. Energy explorers led declines as crude oil prices tumbled. The Topix index tumbled 3.1 percent to 1,401.95 in Tokyo, the lowest closing level in more than three months and erasing gains from 2015. The Nikkei 225 Stock Average dropped 2.7 percent to 17,218.96 to cap its longest losing streak since August amid turmoil in Chinese equity and currency markets. The yen traded at 117.52 per dollar, from 118.29 when Japan s stock market closed on Friday.

Investors are questioning when the weak yuan and the fall in Chinese shares will stop and concerns over the Chinese economy is worsening market sentiment, Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. Japanese stocks are oversold from a valuation perspective. The Topix s 14-day relative strength index fell to 24.4 on Tuesday, below the level of 30 which some traders say indicates that shares will rise. The stock index is down 9.4 percent this year.


http://davidstockmanscontracorner.com/abenomics-at-work-japanese-stocks-fall-6th-straight-day-down-9-4-ytd/[2]


Kyle Bass Japan……………….Abenomics has Totally FAILED!!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=Kyle+Bass+Japan&max-results=20&by-date=true[3]



Asia Recession………………….It’s Going to HAPPEN and You Read it HERE First!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=Asia+Recession&max-results=20&by-date=true[4]


Six Days Down: Baltic Dry Index Approaching 400 Points Update
Reuters

The Baltic Dry Index sank to a new record low for the sixth straight session on Tuesday brought down by record low capesize. The overall index fell 3.13 percent to 402 points. The capesize index shed 48 points, or 15.29 percent, sinking to its all-time low of 266 points.

The panamax index fell nine points to 411 points. Jan 11 (Reuters) The Baltic Exchange s main sea freight index, which tracks rates for ships carrying industrial commodities, slid to a fifth consecutive record low on Monday on economic worries about China and a surplus of vessels. The overall index, gauging the cost of shipping dry bulk cargoes including iron ore, cement, grain, coal and fertilisers, fell 3.26 percent to 415 points.

The index has fallen by more than 13 percent in 2016. A downturn in dry bulk shipping has worsened significantly in recent months as demand for iron ore and coal has declined in the response to slower economic growth in China.


http://gcaptain.com/2016/01/12/baltic-dry-index-falls-to-another-fresh-low-415-points/#.VpUojBBulPY[5]


Shipping industry calls out distress signals

In late November, the Baltic Dry Index, which tracks freight charges for shipments of dry bulk goods, hit an all-time low. Its fall underscores just how risky it has been to make macro bets on an economic recovery through exposure to the shipping sector. Apart from a brief rally in 2010, the downturn in the fortunes of shipyards and shipping groups has endured for longer than many expected. Trade, whether by volume or by value, has been virtually flat for years largely because slowing growth in China has dramatically reduced demand for commodities, such as iron ore.

As a result, financial distress in the maritime industry persists. Charter rates for container vessels barely cover the operating costs, leaving shipping companies with little ability to pay their debts. Private equity and distressed debt specialist groups including Blackstone, Carlyle, Centerbridge Partners, KKR, Oaktree Capital Management and WL Ross have rushed to fill the void, by offering rescue finance, buying up debt at a discount and turning it into equity, or buying new and secondhand vessels. So far, their results have been mixed, hindsight shows that some groups ventured into the sector too early. But a more nuanced view suggests that, today, there may finally be pockets of opportunity amid the general rout.

KKR has been among the most active in shipping, adopting a multi-pronged approach. This has involved the creation of a joint venture in 2013 to invest in distressed shipping assets, as well as buying bank loans to shipping companies at a discount. Consequently, the private equity group now owns dozens of ships. It recently added to this collection with its latest acquisition: Chembulk Tankers, a Connecticut-based division of Berlian Laju Tanker, a listed Indonesian shipping company.


http://www.hellenicshippingnews.com/shipping-industry-calls-out-distress-signals/[6]


China’s Shipyards Vanish as Country Loses Appetite for Iron Ore

The weakening yuan and China s waning appetite for raw materials have come around to bite the country s shipbuilders, raising the odds that more shipyards will soon be shuttered. About 140 yards in the world s second-biggest shipbuilding nation have gone out of business since 2010, and more are expected to close in the next two years after only 69 won orders for vessels last year, JPMorgan Chase & Co. analysts Sokje Lee and Minsung Lee wrote in a Jan. 6 report. That compares with 126 shipyards that fielded orders in 2014 and 147 in 2013.

Total orders at Chinese shipyards tumbled 59 percent in the first 11 months of 2015, according to data released Dec. 15 by the China Association of the National Shipbuilding Industry. Builders have sought government support as excess vessel capacity drives down shipping rates and prompts customers to cancel contracts. Zhoushan Wuzhou Ship Repairing & Building Co. last month became the first state-owned shipbuilder to go bankrupt in a decade.

The chance of orders being canceled at Chinese yards is becoming greater and greater, said Park Moo Hyun, an analyst at Hana Daetoo Securities Co. in Seoul. While a weaker yuan could mean cheaper ship prices for customers, it still won t be enough to lure back any buyers. Chinese shipbuilders won t be able to revive even if you try breathing some life into them.
http://www.newsmax.com/Finance/StreetTalk/China-shipbuilding-iron-ore/2016/01/12/id/709115/[7]




Baltic Dry Index falls to 402, down 13 points.

Today, Tuesday, January 12 2016, the Baltic Dry Index decreased by 13 points, reaching 402 points. Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Tuesday, January 12 2016, when the index dropped to 402 points.


http://www.hellenicshippingnews.com/baltic-dry-index-falls-to-402-down-13-points/[8]


U.S. coal getting squeezed

Arch Coal becomes the latest U.S. coal giant to file for bankruptcy.
By Daniel J. Graeber

NEW YORK, Jan. 12 (UPI) — A bankruptcy filing by Arch Coal Inc. pushes the default rate for U.S. coal companies up 4 percent from the end of December, Fitch Ratings finds. Arch Coal, one of the largest coal companies in the country, filed for Chapter 11 bankruptcy protection Monday. “Under the terms of the agreement, the lenders have agreed to support a restructuring transaction that will eliminate more than $4.5 billion in debt from Arch’s balance sheet and position the company for long-term success,” the company said in its notification.

Expansions in the coal industry outside the United States means export options for the U.S. coal industry are dwindling, and an increase in the value of the U.S. dollar makes U.S. goods more expensive. Alpha Natural Resources, one of the largest U.S. coal companies, filed for bankruptcy protection in August. At least two other companies in, or tied to, the coal industry defaulted last year.


http://www.upi.com/Business_News/Energy-Industry/2016/01/12/US-coal-getting-squeezed/8271452598464/[9]


EIA: Coal Prices, Production Decline in 2015
By Steven Johnson

The price of coal is falling and so is production, according to the Energy Information Administration. The agency said Jan. 8 that low natural gas prices, lower demand and more environmental regulations factored into declining prices and mine output in 2015.

Most major coal-producing regions witnessed double-digit price drops in 2015 after a relatively stable 2014. Coal prices in the Powder River Basin in Wyoming, the nation s most important deposit of low-sulfur coal, fell by 18 percent, EIA said. Only the Rocky Mountain region, one of the agency s five defined coal regions, experienced stable prices in 2015. The Central Appalachian region saw a 22 percent price dip at the same time that its production dropped by 40 percent, compared with the 2010-2014 average, EIA said.

Difficult mining geology and high operating costs contributed to the lower numbers, the agency reported.

EIA said overall U.S. coal production in 2015 was about 900 million short tons, 10 percent lower than in 2014 and the lowest level since 1986.

U.S. coal exports also declined in 2015, especially to major coal export destinations such as Europe and China. When complete data are available, EIA said exports will show a 21 percent decline from 2014, including a 50 percent drop in shipments to the United Kingdom and Italy. The agency said the trends are likely to continue into 2016 with low natural gas prices and the uncertainty about the cost of compliance for coal plants under new federal emission regulations. The power sector is expected to use about 764 million short tons of coal in 2016, down sharply from a peak of more than 1 billion short tons in 2008.


http://www.ect.coop/industry/trends-reports-analyses/eia-coal-prices-production-decline-in-2015/88199[10]


Bank of America: Rail Traffic Is Saying Something Worrying About the U.S. Economy

Rail carloads are looking recessionary.
By Julie Verhage

It’s not the jobs report or the latest housing data but railway cargo that has analysts at Bank of America concerned.

Railroad cargo in the U.S. dropped the most in six years in 2015, and things aren’t looking good for the new year.

“We believe rail data may be signaling a warning for the broader economy,” the recent note from Bank of America says. “Carloads have declined more than 5 percent in each of the past 11 weeks on a year-over-year basis. While one-off volume declines occur occasionally, they are generally followed by a recovery shortly thereafter. The current period of substantial and sustained weakness, including last week s -10.1 percent decline, has not occurred since 2009.”

BofA analysts led by Ken Hoexter look at the past 30 years to see what this type of steep decline usually means for the U.S. economy. What they found wasn’t particularly encouraging: All such drops in rail carloads preceded, or were accompanied by, an economic slowdown (Note: They excluded 1996 due to an extremely harsh winter).


http://www.bloomberg.com/news/articles/2016-01-11/bank-of-america-rail-traffic-is-saying-something-worrying-about-the-u-s-economy[11]


Baltic Dry Index!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=Baltic+Dry+Index&max-results=20&by-date=true[12]


Obama WAR on Coal………………….Job Well Done…………..Victory!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=Obama+WAR+on+Coal[13]


Transportation Index………………….RECESSION Dead Ahead!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=Transportation+Index[14]



Latest forecast January 8, 2016

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 0.8 percent on January 8, down from 1.0 percent on January 6. The forecast for the contribution of inventory investment to fourth-quarter real GDP growth declined 0.2 percentage points to -0.8 percentage points after this morning’s wholesale trade report from the U.S. Census Bureau.

Tuesday, January 12, 2016



Obama’s America………………..Members of the Middle Class of America, BEND OVER because Obama “IS” going to Drill YOU Again Tonight!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=Obama%27s+America&max-results=20&by-date=true[15]



The American Middle Class has Been Totally SCREWED by Obama and the ASSHOLES Running the Federal Reserve!!!!!!!!!!!!!!!!!!!!!!!
http://www.therealnewsmatters.com/search?q=The+American+Middle+Class&max-results=20&by-date=true[16]

References

  1. ^ http://davidstockmanscontracorner.com/the-cascade-of-deflation-asian-shipyard-demand-collapsing/ (davidstockmanscontracorner.com)
  2. ^ http://davidstockmanscontracorner.com/abenomics-at-work-japanese-stocks-fall-6th-straight-day-down-9-4-ytd/ (davidstockmanscontracorner.com)
  3. ^ http://www.therealnewsmatters.com/search?q=Kyle+Bass+Japan&max-results=20&by-date=true (www.therealnewsmatters.com)
  4. ^ http://www.therealnewsmatters.com/search?q=Asia+Recession&max-results=20&by-date=true (www.therealnewsmatters.com)
  5. ^ http://gcaptain.com/2016/01/12/baltic-dry-index-falls-to-another-fresh-low-415-points/#.VpUojBBulPY (gcaptain.com)
  6. ^ http://www.hellenicshippingnews.com/shipping-industry-calls-out-distress-signals/ (www.hellenicshippingnews.com)
  7. ^ http://www.newsmax.com/Finance/StreetTalk/China-shipbuilding-iron-ore/2016/01/12/id/709115/ (www.newsmax.com)
  8. ^ http://www.hellenicshippingnews.com/baltic-dry-index-falls-to-402-down-13-points/ (www.hellenicshippingnews.com)
  9. ^ http://www.upi.com/Business_News/Energy-Industry/2016/01/12/US-coal-getting-squeezed/8271452598464/ (www.upi.com)
  10. ^ http://www.ect.coop/industry/trends-reports-analyses/eia-coal-prices-production-decline-in-2015/88199 (www.ect.coop)
  11. ^ http://www.bloomberg.com/news/articles/2016-01-11/bank-of-america-rail-traffic-is-saying-something-worrying-about-the-u-s-economy (www.bloomberg.com)
  12. ^ http://www.therealnewsmatters.com/search?q=Baltic+Dry+Index&max-results=20&by-date=true (www.therealnewsmatters.com)
  13. ^ http://www.therealnewsmatters.com/search?q=Obama+WAR+on+Coal (www.therealnewsmatters.com)
  14. ^ http://www.therealnewsmatters.com/search?q=Transportation+Index (www.therealnewsmatters.com)
  15. ^ http://www.therealnewsmatters.com/search?q=Obama%27s+America&max-results=20&by-date=true (www.therealnewsmatters.com)
  16. ^ http://www.therealnewsmatters.com/search?q=The+American+Middle+Class&max-results=20&by-date=true (www.therealnewsmatters.com)