Dry bulk shipping weekly analysis (Part 1: Fundamental indicators)

Market Realist


Last week (August 5 to 9), dry bulk shipping companies stood relatively flat. Some key developments that moved share prices were Eagle Bulk Shipping Inc.’s (EGLE) and DryShips Inc.’s (DryS) earnings calls, JP Morgan upping its target price on Diana Shipping Inc. (DSX), China reporting the largest year-over-year production growth of 9.7% since last December, and an unchanged consumer inflation rate compared to June’s figure.

(Read more: Dry bulk capacity growth slows further, encouraging sign for later half of 2013)

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Dry Bulk Shipping Stock Performance 2013-08-11

Earnings summary

The market took it as a negative that Eagle Bulk Shipping Inc. (EGLE) either didn’t or couldn’t do much to increase the strength of its balance sheet, which sent shares down the day after the earnings release. While DryShips Inc. (DRYS) missed estimates, investors were quite pleased with the several actions it took to increase its liquidity and financial strength.

(Read more: Supramax price rises first time since mid 2010, signs of shipping recovery)

China and industry

Although data out of China was favorable, the tapering of bond purchases in the United States (which economists widely expect to begin in September now) has kept optimism in China at bay. As a result, dry bulk shipping companies (with the exception of EGLE, DRYS and DSX) stood relatively unchanged throughout the week. On the industry level, we’re also seeing some changes in global trade, supply, ship prices, and shipping rates. In this series, we’ll take a closer look at the following key dry bulk shipping indicators.

Learn more about the key performance indicators of the dry bulk shipping industry

(Read more: Why the Baltic Dry Index has decoupled from the Chinese market)

Continue to Part 2: Ship orders.

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