Rocket, It does seem ironic that you have in the past understood and warned how a climbing shipping costs are negative to E25, but when the situation reverses...
Yes there was a reduction to $32/t, but that estimate still occurred at a time when the Baltic Dry index was over 3,000. The Baltic dry is now under 1,500. Doesn't it stand to reason that if the Baltic Dry has fallen >50%, shipping costs will have also fallen? Are you suggesting that the index construction of the Baltic Dry index is fundamentally flawed so it isn't a good estimate of the cost of shipping?
Anyway we could quibble whether its $14, $15 or $18/t but shipping would appear to be into this sort of price range, which well under $30/t which you suggest isn't going to happen.
The case for around $14/t is that the Baltic dry was 3187 when E25 announced costs were low $30's/t (would it be unreasonable to guess this low $30's was perhaps $31.87/t?. The Baltic Dry is now 1423 so following the ame logic a revised estimate is $14.23/t?
The case for $15/t or $16/t would be as per above, and adding a little bit of conservatism into the figure.
The case for $18/t would be that E25 has previously mentioned this as a long-term figure. Looking at a graph of the Baltic Dry, it does indeed look to be back around long-term averages.
E25 Price at posting:
$1.30 Sentiment: Buy Disclosure: Held
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