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Drybulk shipping rates surged higher overnight, drybulk shippers rally

  • Drybulk shipping rates, as measured by the Baltic Dry Index, surged 8.2% overnight, driven by strength across the board but mainly in capesize and panamax rates.
  • Capesize rates jumped 15.7% to $13,677/day, Panamax rates climbed 9.7% to $5,883/day, and Supramax rates rose 1.9% to $9,004/day.
  • Related drybulk stocks include: DRYS +2.6%, PRGN +5.8%, DSX +3.9%, FREE +7.9%, EGLE +2.2%, NM +5.6%, NMM +1%, SBLK +6.2%, SB +5.7%, BALT +3.8%, SHIP +0.7%, DCIX flat.
Comments (12)
  • cashewking
    , contributor
    Comments (309) | Send Message
     
    Why the surge in rates in a weak global economy ?
    14 Aug, 11:11 AM Reply Like
  • citracyde
    , contributor
    Comments (42) | Send Message
     
    Grain harvest is coming - market preparing for seasonally higher rates? Do some of the latest geopolitical events actually support a case for new ocean-based trade routes due to the breakdown of trade relations between nations? More routes would equal more capacity used due to inefficiency or at least a temporary capacity drop for the shifting of the routes that ships service. Would love to hear the thoughts of people closer to this industry.
    14 Aug, 12:05 PM Reply Like
  • sraphael
    , contributor
    Comments (36) | Send Message
     
    One reason is that the number is coming off a low base. Looks bigger than it otherwise is. Second and more importantly, it's time for the rates to rise. We're coming into the up portion of the cycle, some years a big jump some years less so. There are always goods to move despite a good or bad economy. Weather, economic cycles, all play a part. This should go on for at least two or three months if the past is prologue (it almost always is, to some degree). Additionally, check out the article in the WSJ today on the cost of coal int he US. Cheaper to import than move by rail secondary to the world wide increase in supply, low wages, etc in foreign countries such as Colombia, and others. A situation predicted by GE. Stay long and stay patient for the intermediate short term just like many of us have advised going into this. Look at the forest, not the trees..
    14 Aug, 12:15 PM Reply Like
  • sraphael
    , contributor
    Comments (36) | Send Message
     
    Most predictions are that grain harvests are going to be much larger than usual. This will lead to lower world prices, increased demand and.........yes, increased bulk shipping rates
    14 Aug, 12:26 PM Reply Like
  • dezee
    , contributor
    Comments (532) | Send Message
     
    Longer shipping routes for goods need to travel when sanctions from multiple companies especially from such large organizations.
    14 Aug, 03:23 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5436) | Send Message
     
    Russia is a big producer of grain for Europe. Will the U.S. need to export more of our grain? Oh no, 98% of U.S. grain has GMOs. Well. Either grain or no grain.
    14 Aug, 10:47 PM Reply Like
  • starcorral
    , contributor
    Comments (408) | Send Message
     
    It has been more than a year since I bought NMM cheap. At that time I read (at length) why their retiring of fleet vessles and leasing of new ones combined with shipping rates in a long term downtrend would end the company.

     

    This made absolutely no sense to me because my business education began and ended with the learning of the law of supply and demand - something MBA's may not be taught(?).

     

    In any event, rates went up and NMM began benefiting from an agressive but well thought out strategy lifting it 40%.

     

    The story of Alcoa Aluminum is much the same. None of the MBA's who posted where us "amateurs" get our opinion gave much consideration of worldwide aluminum companies liquidating and demand going up. Instead a bleak picture was given about aluminum futures and excess capacity. Up? Yeah - 53%
    14 Aug, 11:50 AM Reply Like
  • lunco
    , contributor
    Comments (129) | Send Message
     
    In defense of MBA's...
    I also bought NMM over two years ago realizing that the world wide economic environment that we were in then would continue to improve and realizing that NM and NMM's management was positioning themselves to take advantage of those changes. I also read the articles of the perils of being in the Bulk Rate shipping business and how a capacity overhang still put a drag on the market. However, obtaining my MBA along with 45 additional years of experience taught me to dig deeper into the capacity issue as it applied to NMM specifically. The result was a my making a substantial investment in NMM that has been growing ever since.
    I would suggest that if the articles you are reading are indeed written by MBA's that the author as an individual should be held responsible and not the MBA degree which they have received. Also, for what it is worth, an MBA degree is much more concerned with the operations of a business than world economics or investment advice. Therefore, should MBA be giving advice concerning economics or investing, hopefully readers will determine if they have additional expertise in these areas other than their MBA degree before putting too much stock in their advice.
    14 Aug, 01:31 PM Reply Like
  • therealevan
    , contributor
    Comments (146) | Send Message
     
    Now for the next week there will be 10 articles about DRYS and how now is the time to buy because of this tiny catalyst! Don't worry guys, all these articles will be completely identical, so just read one and you'll get the picture of all ten.
    14 Aug, 03:47 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5436) | Send Message
     
    If Europe goes to war (which I hope not), what will happen to Greek shippers like (NASDAQ:DRYS)? (DRYS) is riding (NASDAQ:ORIG).

     

    German GDP unexpectedly fell. France too. Hm..............
    14 Aug, 10:51 PM Reply Like
  • alphaman
    , contributor
    Comments (161) | Send Message
     
    Won't the bankrupt dry bulkers like EAGLE keep rates low because they have eliminated most, if not all, of their debt and can therefore operate profitably at a lower day rate?
    15 Aug, 01:44 AM Reply Like
  • sraphael
    , contributor
    Comments (36) | Send Message
     
    It depends on what the terms of the reorganization are. They still have to satisfy the money needs of the "new creditors". You can only go so low. Having said that, your argument is valid. Its the reason a lot of the serial bankrupt US airlines have survived, much to the consternation of the solvent (if you can use that term to describe ANY US airline) airline companies.
    15 Aug, 08:30 AM Reply Like
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