Diana Shipping 4Q16 Earnings Call Notes

Anastasios Margaronis

2% projected market increase in 2017

“According to Clarksons, in 2016, a 7% increase in total Chinese seaborne dry bulk imports has been offset to a large extent by a relatively broad decline in dry bulk shipments to other key regions. By current estimate, seaborne dry bulk trade growth is expected to be 1.3% in 2016. The estimate for 2017 stands at $5 billion tons, an increase of about 2% compared to 2016.”

Fleet grow low

“The Clarksons estimates for fleet growth in 2017 is mere 1%. According to Banchero Costa, new orders for – of dry bulk vessels in 2016 amounted to just 36 units, a sharp decline from the 380 new orders placed in 2015 and a massive 933 new order placed in 2013. Only three orders for Kamsarmax were replaced in 2016, compared to a total of 93 units ordered in 2015.”

Steel production peaked in 2014

“According to Clarksons, world steel production declined to 1.3346 [ph] billion tons in 2016. This represents a drop of 0.7% compared to 2015, continuing global production decline since 2014, when production reached the peak of 1.6477 [ph] billion tons. According to Banchero Costa, Chinese steel output during the first 11 months of 2016 was 739.5 million tons, up 0.4% year-on-year.”

There are high stockpiles of iron ore but the behavior is unpredictable

“With stockpiles of iron ore in the past, we have, all of us, not us in Diana proven to be wrong. Every time we felt that iron ore stockpiles are very high. The Chinese would buy more. And when we felt that they didn’t have enough, for some reason they would stop buying. So unfortunately, it’s unpredictable. Their criteria have to do more with how they view the cost of acquiring iron ore and the prospect of utilizing it in their steel industry. So from here onwards what we are looking at is pretty high stockpiles admittedly. But that is not sufficient in itself to make us draw the conclusion that the Chinese are not going to continue buying iron ore, if they feel that it is a opportunity to do so for them.”

Andreas Michalopoulos

Not in a restructuring mood

Hi, Amit, there’s always dialogue with your lenders and we are currently there nonetheless not in any kind of restructuring or any such mood. As we said many times, we let the dust settle. We pay our obligations and that’s where we stand today.