CMA CGM sees further profit rise in H2 on improving shipping sector
http://www.hellenicshippingnews.com/cma ... ng-sector/
The Iraq-Iran War was one of the bloodiest conflicts of the past 50 years.
The brutal Iraq-Iran War killed over 1 million people. It also rocked global energy markets.
The US Navy escorted the oil tankers of US allies like Saudi Arabia and Kuwait. But Iran’s oil shipments were completely vulnerable.
John Fredriksen struck a deal with the Iranian government to ship the country’s oil exports when nobody else wanted to. This gave him huge bargaining power, which he used to make enormous profits.
Recently, Fredriksen made a huge bet that the shipping industry is about to turn around.
It’s one of the few industries that never really recovered from the 2008 financial crisis.
The Baltic Dry Index (BDI) measures the cost to move raw materials like iron, coal, or wheat across the ocean. It’s also a benchmark for charter rates.
The shipping glut is shrinking after years of bankruptcies and shippers scrapping vessels. There are almost no new ships on order.
That means there won’t be any new supply until at least 2020. (Again, it takes approximately two years to build a ship.)
China will need to import a lot of commodities to create the One-Belt One-Road infrastructure. That will create demand for shippers.
Not to be outdone, President Trump has announced his own trillion-dollar plan to repair, replace, or build critical infrastructure.
And, of course, he’s promised to build a 2,000-mile wall along the US-Mexico border. This is another huge infrastructure project.
We might even be looking at the best time ever to enter the shipping industry.
Here are a few more reasons why…
1. It looks like the bottom has already been carved.
2. The Baltic Dry Index is well off its all-time low.
3. Several shipping stocks have more than doubled over the past year. A few have tripled.
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