FBR Capital on Shipping: Increasing February Dry Bulk Disruption to 9% on Port Hedland Data - Approaching Dry Bulk Rebound Could Be Stronger
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Price: $25.66 -6.08%
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11 Buy, 5 Hold, 4 Sell
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Up: 4 | Down: 18 | New: 11
Rating Summary:
11 Buy, 5 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 4 | Down: 18 | New: 11
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FBR Capital on Energy & Natural Resources: Shipping - Increasing February Dry Bulk Disruption to 9% on Port Hedland Data - Approaching Dry Bulk Rebound Could Be Stronger
FBR analyst says, "Port Hedland, Australia's largest iron ore port, reported February iron ore exports of 12.9 million tons, 3.3 million tons below the previous six-month export run-rate of 16.1 million tons. The lower export level was likely due to the two-day closure of the port as a precaution for Cyclone Carlos and seasonality. We believe the lower levels of exports in February provide more room for a rebound in the upcoming months as operations return to normal levels."
"The 3.3 million tons of lost exports are 2.3 million ahead of our previous forecast of 1 million tons being lost from the two-day closure. In total, we now estimate that February iron ore and coal cargoes were at least 13.7 million tons below their run-rate levels, up from our previous estimate of 11.5 million tons. This equates to 8.7% of the 158 tons of iron ore and coal that were seaborne per month in 2010. The 13.7 million ton export disruption estimate does not include the impact from Indonesia restricting coal export permits for part of February or the impact from Russia's ports being frozen."
"We believe that the significant disruptions to the dry bulk market, particularly the Capesize market, in February should improve in March and lead to higher day rates for Capesize vessels. We reiterate our Outperform ratings on Genco Shipping & Trading (NYSE: GNK) and Baltic Trading (Nasdaq: BALT), which are the best positioned to benefit from an improvement in the Capesize market. Please see our report, "Dry Bulk Exports Starting to Increase After Weather Disruptions," published on March 9, 2011, for more details."
FBR analyst says, "Port Hedland, Australia's largest iron ore port, reported February iron ore exports of 12.9 million tons, 3.3 million tons below the previous six-month export run-rate of 16.1 million tons. The lower export level was likely due to the two-day closure of the port as a precaution for Cyclone Carlos and seasonality. We believe the lower levels of exports in February provide more room for a rebound in the upcoming months as operations return to normal levels."
"The 3.3 million tons of lost exports are 2.3 million ahead of our previous forecast of 1 million tons being lost from the two-day closure. In total, we now estimate that February iron ore and coal cargoes were at least 13.7 million tons below their run-rate levels, up from our previous estimate of 11.5 million tons. This equates to 8.7% of the 158 tons of iron ore and coal that were seaborne per month in 2010. The 13.7 million ton export disruption estimate does not include the impact from Indonesia restricting coal export permits for part of February or the impact from Russia's ports being frozen."
"We believe that the significant disruptions to the dry bulk market, particularly the Capesize market, in February should improve in March and lead to higher day rates for Capesize vessels. We reiterate our Outperform ratings on Genco Shipping & Trading (NYSE: GNK) and Baltic Trading (Nasdaq: BALT), which are the best positioned to benefit from an improvement in the Capesize market. Please see our report, "Dry Bulk Exports Starting to Increase After Weather Disruptions," published on March 9, 2011, for more details."
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