Q3 has traditionally been the BDI’s strongest Q in the cycle. This year, that will likely not be the case. As I was putting together my Q3 summary, there was a tinge of regret regarding SBLK. As a major holding, it was the only shipping one in which I did not realize major capital gains. GOGL, ZIM, FLNG - all have wonderful gains in 2022. That said, I don’t think the SBLK story is done - lots of upside with a fleet of over 115 scrubber-fitted vessels. GNK, with its very low leverage, is also appealing
Given the collapse of the container shipping spot market on one major aggregate route (Asia-to-US-West-Coast), I am a little puzzled why a liner company would still pay a premium on 2nd hand tonnage over 12-years old? The newbuild orderbook is weighted towards the larger CV sizes. So, in particular, why pay $85M for the “Northern Jasper”? Then again, the liner company involved in all three transactions is #1 liner company - MSC. With all their existing routes, perhaps MSC, has a specific need for each vessel?
10/17 - Pondered on GOGL
10/18 - Trimmed GOGL on the bounce
Even though Q3 BDI did not play out as in a normal cycle, GOGL should have decent results. At least, that’s what the Q2 “look ahead” suggested with Q3 to-date averages. Having realized a bunch of LT losses elsewhere recently, it seemed okay to realize some gains and plan a re-group of the GOGL thesis.