More downgrades for Dry Bulk Carriers

I've been harping about how bad it is and will be for dry bulk carriers, but the stock prices have gone up, which made start to wonder if I was correct.

Oppenheimer has just downgraded their forecast for this sector, so I guess I'm not alone. Not that being alone would bother me, I don't generally agree with the crowd.

“ANAEMIC” demand will see dry bulk spot rates only rise slightly above break-even levels in the first half of 2009, according to US investment bank Oppenheimer & Co which has downgraded forecasts for the troubled sector

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Mr Burk also said bankruptcy risks were greater in the dry bulk sector with the potential for listed dry bulk companies to face charter renegotiations and the “violation of collateral coverage loan agreements”.

“Management teams on the dry bulk side may begin considering the potential implications of one or two years of day rates at cash break-even levels,” he said, urging them to cancel or delay newbuilding orders and repay debt if possible.

He cited anecdotal evidence that between 100-200 larger bulk carriers were currently anchored without employment, and a further 500 smaller ships also idle and awaiting better charter rates.

Maybe we can retrain the Somali Pirates from capturing ships for ransom, to maintaining them during lay-ups.