please print
---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 01/16/2001 
09:54 AM ---------------------------
   
	Enron Capital & Trade Resources Corp. - Europe
	
	From:  Chris Connelly                           01/14/2001 11:36 AM
	

To: George McClellan/HOU/ECT@ECT, Stuart Staley/LON/ECT@ECT, Jeffrey A 
Shankman/HOU/ECT@ECT, Mike McConnell/HOU/ECT@ECT, Kevin 
McGowan/Corp/Enron@ENRON, Tom Mcquade/HOU/ECT@ECT
cc: Peter Bradley/LON/ECT@ECT, Jez Peters/LON/ECT@ECT, Candace 
Parker/LON/ECT@ECT, Kenny Nicoll/LON/ECT@ECT, Dimitri Taylor/LON/ECT@ECT, 
Andy James/EU/Enron@Enron, Cornelia Luptowitsch/LON/ECT@ECT, Dorte 
Kjaergaard/LON/ECT@ECT, Fiona Ryan/LON/ECT@ECT 
Subject: Freight weekly report


Enron Shipping Services Weekly report 02/2001




Highlight

The cape market continues to slide ever southward with owners unable to 
repeat last done on rates obtained.  Richards bay to Rotterdam rates have 
fallen about $2 in 45 days ( key coal route )  and Brazil to China rates have 
fallen $3 in the same period ( key iron ore route ) which has owners running 
for cargo  coverage.  However charterers smell blood and are not willing to 
enter into freight contracts ( Edf trading and NCSC  are playing spot and so 
are we ).  Even the mighty Bocimar seems unable to turn the tide and are 
offering us cheap rates on the quiet as they keep playing their vessels spot 
and are  being run over.  The average cape rate has lost $ 4200 from its peak 
and hangs around $20,400 presently.  To get cargo contracts for the balance 
of the year an owner has to fix his vessel at around $16,000 to get 
charterers willing to agree.  The downward fall is the result of two 
concurrent market shifts 1- coal shipments into Europe have slowed 2- market 
is predicting that sometime in Q1 2001 , Japanese steel mills will cut back 
on production and reduce their raw material imports.  As a result, you have 
on one side, Japanese vessel owners panicking as they fear that their main 
account ( Japan ) will not need their vessels shortly and you have the 
European owners also worried as they are seeing their utilities postponing 
their coal requirements.  Furthermore, the holiday season in Asia is 
approaching and little activity is predicted for the next few weeks.

On the panamax front, the outlook is still very bleak as you now have about 
two new buildings being launched per week in a market which is currently well 
balanced.  In the spot market, the Atlantic is weak as the grain out of the 
US gulf is slow as the main rivers are frozen upstream and the vessels have 
little to load.  In the east the market is strong as there is a flurry of 
grain activity but in the paper market, February is already traded at a big 
discount to Jan as people predict a quick slowdown in the activity as Asia 
goes on holiday.

On the long term strucutred front, last week we agreed to charter a new cape 
building starting in late 2003 for 10 years with an option for an 11th, 12 
th, 13 th and 14 th year.  Furthermore, we have the option to buy the vessel 
after year 3 at a fixed agreed Japanese yen amount ( if currency goes our 
way, we buy the vessel dirt cheap !!!).  The counterparty in Mitsui, a big 
and financially strong Japanese company.  The deal is still subject a few 
details but we hope to be able to book this deal within the next 5 months 
when the ship building contract will be drawn up.

Also last week we had about 6 banks over a period of three days come to our 
office to discuss possible opportunities in the shipping world and to get 
them to trade on EOL.  Larry Lawyer and Simon Crowe organized the meetings 
and we expect a few of these leads to pay off sometime this year.




Market
	Short term	Medium term	Long Term
Handy Max	Down	Down	Down
Panamax	Flat	Flat	Down
Cape Size	Down	Down	Down

Cape

Average time charter rate: $ 20,400
Spot RBCT/Rotterdam: $ 9.30
Spot Tubaro/China: $11.30
Spot Bolivar/Rotterdam: $ 7.35

Panamax

Average time charter rate: $ 11,200
Spot US Gulf/Japan: $21.20


Deals Done
Physical Freight
ECS freight 
Fixed a Cape from Keoyang from RBCT/Hunterstone at $9.40
Fixed a Panamax from Norden from Drummond/Liverpool at $ 8.50
Fixed a Panamax from Transfield from Santa marta to Hit at $10.20
Fixed out a panamax to transfield on time charter which was spot open in US 
gulf
Third parties freight deals
Sold 4 Cape cargoes to Eastern Rich from Brazil to China at $9.80
OTC 
FFA s
Numerous swaps on both the Cape and Panamax routes
      
EOL
Traded with Cargill, Edf trading, Navios and have now traded over 3 million 
tons LTD

Travels
Pierre will be in Paris on Monday but Andy and I should be in all week.


Chris