Heh Trader! Well I did sell some about 4-5 posts ago and traded some for profit. The core 2000 I have are currently from break even to under water pricewise"due to the precipitious drop in all shippers over the last 4-6 months. If I knew it was going to do that-I'd have sold them and bought back in-not that smart-LOL! It isn't fair to SSW, but I believe bulker problems and fear of the global economy degradation, caused container shippers to be unfairly punished along with bulkers! Contianers dragged with bulkers!
Dry bulkers (as you point out) are having pricing problems because their contracts signed to ship are shorter. Pricing pressure results. Therefore they are more price sensitive to to changes and more exposed. Even DRYS has bounced off the bottom, but is still pretty depressed-it will change in 6-18 months for them too.
Most container shippers and "contract shippers" like SSW are different. Their contracts are very longterm (generally 7-12 years) with protective terms within the contracts. To punitive for contract cancellations. SSW is only signed up with the biggest! There is PPS pressure on those big shippers if one owns shares, but they "really" take a long term outlook to shipping and fleet planning, are very profitable averaging years, and are just simply more likely to use SSW in place of their own depreciating and aging ships! This makes SSW more immune to pricing fluctuations (though nothing is for sure) because they already give these shippers a daily fee break in return for signing on longterm. That makes SSW contracts more economical for classic shippers to use than to actually run their own and total risk/costs are shared!
According to SSW whose ships are mostly new, they have no expiring contracts until 2012 and most are in 2015 and later. Their ships are very young in their life cycle and thats important!
With the global economy as it is, I don't see great appreciation in SSW PPS for a while (a bit here and there off of oversold positions from 2008). Incremental! I expect SSW to hold their divvy for year 2009 to where it is. If things improve they will bump in 2H2009-IMO! Their mid-term problem is the need to raise cash in 2010. Their credit is great, but credit markets suck currently! They have a lot of new ships coming out (all signed to contracts in advance (7-12 years). They are covered for this year!
For 2009, I think I am fine here, but if the PPS grows form here, I will not hesitate to profit take! If the PPS drops back to 6-7, I'll just buy more and trade em!! Oh and collect the divvy as long as they throw it at me!
Have a good weekend!
Kutz
Free Forum Hosting
Important Announcement
Recommend
Return to General