Warning : Your buying power will shrink 42% in 45days
Base on the previous trend, there will be some interesting development for different “type” of buyers ”
1. Blue Chips Company
Since the collapse of OW, the trend for the blue chips are moving towards the going direct with physical supplier and minimize counter-party risk as much as possible. From a physical supplier prospective it also make sense to work direct with those big boys for the similar reason and its easier to communicate in terms of pricing and operation. However with the increase in price thus the increasing need of the credit facility, it really depends how the financial partner of the supplier and/or the risk appetite of the supplier to see if they can take up the additional need. For some ports trader might make a come back with big client by simply offering credit lines.
2. Normal / medium payment company
RED SEA in the bunker markets, since the blue chips company moving towards the physical supplier means now the trader need to flow downwards on the credit stream for some less blue chips client. The profit margin for those client is more horrible than the making process of Chicken McNuggets, i personally predict this group of client will be leased affected as the numbers of traders fighting for the order will either stay same or increase and since credit terms and price is the number one concern for this group , client will viciously switch to other traders will certain channel cant provide what they want.
3. Risky client
An interesting group, trader make crazy margin when the market is good and trader avoid phone call from credit department when market crash. This are the clients in the most delicate positions as most of this company are not well managed and not the most efficient in the ship management, how they going to handle the credit gap is a huge problem as one key factors for this group is their tight cash flow. Will they get wipe out in the price increment or more traders will come and serve this group ? only 2020 can tells.
Until next time
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