GLG News by Coal Industry Consultants

Navios' prediction that up to half of the dry bulk orderbook through 2010 will be canceled won't happen.

Iron ore and steel production cut backs, whether short-term or longer, do not support the current abysmal dry bulk shipping rates.

Tradewinds reported on USS' SEC filing on a likely write-down of their fleet values, continuing the problems facing the Jones Act tanker company.

Hailed as a "no brainer" by analysts, Genco's forfeiture of over $50M in deposits to cancel the purchase of 6 new ships is nevertheless a bad indicator of how the company will fare going forward.

Tradewinds quoted Fearnley Fonds as suggesting that EGL is already in breach of its debt covenants due to falling asset values and that dividend cuts will be necessary.  While dividend cuts are inevitable, true asset values are higher than suggested.

As a result of the tightening of credit and the drop in crude oil prices Oil company executives will act rationally with regard to what they perceive as in the best interests of their firms.  This will involve a focus on cash generation through 1. focus on production 2. reduction in costs...

Britannia Bulk Holdings (NYSE:DWT) published a press release indicating a dire financial crisis at the company.  DWT is an example of issues facing many speculative dry bulk owners.

Issues that will impact projects going forward are: 1. slower world growth 2. the relative attractiveness of other competing projects worldwide 3. availabilty of finance generally will be increasingly difficult and costlier to obtain 4. in line with point 3 perceived PNG risk will become more expensive...

The bankruptcy filing by Industrial Carriers Corp (ICI) is likely to be replicated many times over the next two years, but will not affect a significant percentage of drybulk operators.

Spot rates for dry bulk shipping have dropped below variable operating costs.  Fundamentally, this should not be the case.  Rates will recover.