<

Must-know: An analysis of dry bulk shipping indicators

Must-know: An analysis of dry bulk shipping indicators (Part 1 of 11)

Overview: An introduction to the dry bulk shipping industry

Dry bulk shipping industry

The dry bulk shipping industry is affected by numerous factors like growth of world economies and commodity supply and demand. In light of the various world economies, China’s economy growth rate and being an important commodity market affects the dry bulk shippers’ movement significantly. Meanwhile, other economies like Australia and Brazil are major iron ore and coal exporters. These economies also impact the dry bulk shipping industry.

Dry Bulk Shipping PerfEnlarge Graph

On a year-to-date (or YTD) basis, the Guggenheim Shipping ETF (SEA)—an index weighted with dry bulk shipping companies—has risen 3.98%. The increase is positive for investors. In contrast, the Baltic Dry Index (or BDIY) has fallen 21.34% YTD.

DryShips Inc. (DRYS) and Navios Maritime Holdings Inc. (NM) are the two major market players in the dry bulk shipping industry. The industry has other players like Safe Bulkers Inc. (SB) and Knightsbridge Tankers Ltd. (VLCCF).

In the following series, we’ll discuss how the iron ore exports from Hedland Port and Brazil play an important role in the dry bulk shipping industry. We’ll also discuss China’s iron ore imports and how inventory levels at ports impact the industry.

China has reduced its dependency on coal imports for thermal electricity generation and is resorting to renewable resources. We’ll discuss China’s coal imports and the economy’s thermal output generation. We’ll look at how the country’s real estate sales and climate is supporting the dry bulk shipping industry.

For the overall dry bulk shipping industry it’s important to understand how stable vessel prices also cushion the industry’s positive performance.

 

The Realist Discussions