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Dry bulk shippers surge again as shipping rates keep climbing

  • Drybulk shipping stocks continue recent sharp gains following further strength in shipping rates, as capesize shipping rates rose 10% overnight to $21,793/day, the first time since Jan. 2012 that capesize rates exceed $20K/day (Briefing.com).
  • The cost of renting a capesize drybulk ship is up 107% YTD, largely driven by higher iron ore shipments to China out of Brazil and Australia.
  • SHIP +16.1%, FREE +12%, EGLE +11.2%, GNK +9.5%, SINO +6.8%, DRYS +5.4%, NM +4.8%, SBLK +4.3%, DCIX +3.5%, DSX +3.5%, VLCCF +3.3%, BALT +2.8%, PRGN +2.2%, SFL +1.6%, KEX +1%.
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Comments (9)
  • Thomasy
    , contributor
    Comments (31) | Send Message
     
    wow! how should we be playing this guys and gals? 10% capesize increase in one day?! I am playing the safer ones like dsx and nm, which are most in danger of goin under?
    6 Sep 2013, 07:53 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1045) | Send Message
     
    The way I prefer to play it is to buy SB. SB are unique in that their costs are so low that they made profits even during the nadir of the dry bulk market. DSX and NM both made losses last two quarters. SB is a good investment even on trailing basis (i.e. without factoring the recent increase in the BDI). So to me SB seems the safest way to play it.

     

    The main problem with SB is that their major exposure is in Panamax and not Capesize. But the panamax index is rising too. Also, Capesize rate increases will eventually lead to panamax increases as shippers will start loading panamax ships with the stuff they usually carry with Capesizes.
    6 Sep 2013, 09:41 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5582) | Send Message
     
    Stay away from (SINO).
    7 Sep 2013, 12:37 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5582) | Send Message
     
    (SFL) is a safe bet.
    7 Sep 2013, 12:38 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1045) | Send Message
     
    SFL has more tankers than dry bulk carriers. And the tanker charter rates have been pretty bad lately.
    7 Sep 2013, 01:23 PM Reply Like
  • therealevan
    , contributor
    Comments (150) | Send Message
     
    Dry bulk index today 1,352.00 73.00 5.71%
    6 Sep 2013, 09:54 PM Reply Like
  • filipo
    , contributor
    Comments (3477) | Send Message
     
    Interesting. CMB is a safe bet.
    6 Sep 2013, 11:12 PM Reply Like
  • Thomasy
    , contributor
    Comments (31) | Send Message
     
    thanks for the input
    8 Sep 2013, 02:07 AM Reply Like
  • surfgeezer
    , contributor
    Comments (6983) | Send Message
     
    Using NMM and SFL. Agree with PM, they do have tankers and SDRL contributing, so not pure dry bulk. Like the safety of NMM over NM since I am an Income investor.
    10 Sep 2013, 12:20 PM Reply Like
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