As we embark on yet another national holiday (cyber Monday), one thing comes to mind: IRON ORE SALES FROM CHINA.
It’s a perplexing situation, mind you. We’ve all grown to distrust anything Chinese, a land who prides itself on selling plastic rice to the poor and human embryonic soup to its rich. So, naturally, when I heard that iron ore demand out of China was more than robust, but fantastic, I was skeptical.
Then I had a conversation with an executive from a dry bulk shipping company. Apparently, this is for real.
Just last week the BDI surged ahead by 15% and is poised to move higher this week. When the dry bulk index moves higher, it tends to do so in very Liberace, behind the Candelabra, ways.
Once again, your top plays in the sectors are BALT, GNK and DRYS. The last two simply for upside explosion potential should Cape rates move up. BALT is your all around play, with even handed representation in the small vessels, as well as the big ones. They’re also the least levered and have enough cash to not only make it through the storm, but also expand its fleet–which is something most bulkers cannot afford.
I’d toss EGLE into the mix too. However, their last earnings report was so bad, I fear massive dilution and/or bankruptcy might be in the cards.
In short, I’ve held this hand for many months now and it has done nothing for me, as I am flat on my BALT position. Nonetheless, the BDI is moving now and so are the stocks. If this industry is going to do anything at all, now is the time, starting with tomorrow’s sit.
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My ship is so heavily loaded, one more share of BALT and water would be pouring in over the sides. It’s Baltastic !!!
BALT potentially FTK
” It will make you better! ” BALT for the win.
Why not throw dsx in the mix. Similar to balt in that is has low leverage and is growing.
Long ‘ship’ loads of $BALT as well. Going to be an interesting week. Expecting $BALT to go HAM to the upside.
The little $FRO monster had some pretty significant volume of late too.
got my Jan 5C and waiting
WHO IS READY FOR A DAILY BREAKOUT?
free…for the penny freaks
the wedge suggests there is potential to wait another couple weeks, but we’ve satisfied the time requirement from a TA perspective to go ahead and break out to the upside now.
No offense Fly but I will wait to hear from Trading_Nymph about Chinese iron ore demand.
She probably has the tonnage broken down by province.
Trader Caddy I could do that. But it’s Sunday Night so here is my quick take, last month benefitted from the lows in Oct prices to attract buyers, mainly Winter Restocking because Rebar futures have not been reflecting a major uptake in demand, Billets either. Tonight we did get a pop over the PMI data but that could be shortlived. We don’t like seeing 137 per tonne cfr for the 61.5% and 63.5%. Not the great buy like last month. If buyers are coming in it would be based on REAL Steel demand and not just restocking at cheap prices. End of the year steel mills need to pay back loans and traders have a harder time for credit. Plus, China continues to try a shut down smaller mills. I just don’t see a massive demand in Steel for Dec, but that is me. Without real demand for Steel, IMHO the mills won’t be buying like last month at these prices…hard winters in China slow a lot of production down.
Two million MOAR peeps went shopping on poor friday?!? But. They are shopping “smarter!” Wtf. No impact from the web? What does “smarter” really mean? Clowncare?
Long Bond has a trapdoor look going. That would not be a good thing.