The Chinese miners have not YET pulled back. Not one ton less. They are actually up in the first half of the year versus last year. It is when iron ore gets well under $90 a ton that they will shutter mines in a big way.
Q1 probably will be a loss. Tanker rates weren't all that great. But that isn't why you buy DRYS now. You buy it for what later this quarter brings and the fourth quarter. ORIG will be about doubling it's revenues in Q4 2014 v. Q4 2013. Bulker and tanker rates could be up 500% from here by then.
And it isn't MY math, it was the author's.
"The full Valemax fleet would be able to haul about 44 million tonnes a year to China, which consumes more than two-thirds of the world's 1.2 billion tonne seaborne iron ore trade."
He's assuming LESS than five trips, which would require 100% utilization and full speed steaming the entire time.
"Your math is also wrong. One 400,000 dwt VLOC on a long haul displaces the need for 4 Capes"
It is not. A cape of 175, 000 tons making five trips a year from Brazil to China carries 875,000 tons. A VLOC of 400,000 making the same five trips hauls 2 million. YOUR math is off.
They will have, first, $15 million in net income more than they put up in Q1 from the ORIG dividend. That offsets almost half of the $34 million loss they posted. THEN, they will NOT have the $32.5 million expense for the ORIG redemption. So add $47.5 million to the quarter if the tankers and bulkers come in about the same. Result will be a profit of about $13 million.
for their bulker segment, about $300 per day more than DSX put up for their very similar, but slightly smaller fleet. But DSX has no ORIG shares that pay them $15 million per quarter or a fleet of tankers that will add nicely as well.
They OWNED DSX and DSX put up $65 million in revs with the same expenses. That is what they would need to do to net the same $15 million DRYS gets as a dividend from ORIG. And DSX has NO tankers. DRYS average TCE for it's bulkers will likely be BETTER than DSX for Q2.
And further, moron, they received a $15 million dollar dividend from ORIG in Q2. That is the SAME as if DSX had posted revenue of $65 million in the quarter. They didn't. Your a punk.
You are an idiot and don't understand financials.
the earnings, pays DRYS at least $15 million per quarter in cash dividend and tanker rates are better than last year. The ONE segment, since DRYS capes are NOT on spot like some idiot doesn't understand, that is not doing well right NOW is panamaxes and only 25 of them for DRYS are on spot. When Panamax rates rise significantly, and they will, DRYS will be hitting on all cylinders and JR the moron will once again be completely wrong. And he'll still lie about his new found obsession of playing options. He will get killed on them along the way.
Hey, moron, any idea how much ore a cape can haul in a year? How much more ore is a 5% increase in demand? How many capes will be added this year for real? Shut up already, nobody cares about your fictitious trading.
"read it somewhere 2nd half of the year we will see 550 ships coming that's freaking huge"
You're an idiot. That's across all classes and types of ships. There are about 240 bulkers "scheduled". 100 of them won't make it and many of them are fictitious orders placed years ago at yards the were never built. They don't fall off the order book until the deals are beyond the final date of non-compliance.
And the importation of coal last year spiked due to the huge drought making hydro untenable. What a moron.
It's been solid for me since it listed on the NYSE. I think it's been four years now. And almost every day someone says that the dividend isn't "safe", yet they pay me every quarter without fail. Seems pretty safe to me, especially with a cost basis in the mid 20's.