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Why the Shipping Index Fell 17% Year-over-Year in Week 23

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Jun. 15 2016, Published 4:11 p.m. ET

Baltic Dirty Tanker Index

The BDTI (Baltic Dirty Tanker Index) stood at 713 on June 13, 2016. For week 23, which ended June 10, 2016, the BDTI fell to 730 from 759 at the beginning of the week. The index fell four of the five days of the week.

The BDTI tracks shipping rates for the transportation of crude oil (DBO) on representative routes. Researchers and analysts follow this index to assess companies’ revenues and earnings potential.

In week 23, the index was lower than last year’s level. On average, the index fell 17% compared to the same period last year. The crude tanker business is seasonal. It’s important to check its year-over-year performance.

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Stock performance

Week 23 had a mixed performance as Nordic American Tankers (NAT) and Frontline (FRO) traded in positive territory. Other crude tanker stocks traded in negative territory. Below are the stock returns on June 10, 2016, compared to their prices a week before.

  • Nordic American Tankers (NAT): rose 5%
  • Frontline (FRO): rose 1%
  • DHT Holdings (DHT): fell 2%
  • Teekay Tankers (TNK): fell 1%
  • Tsakos Energy Navigation (TNP): fell 1%
  • Navios Maritime Midstream Partners (NAP): fell 2%
  • Gener8 Maritime (GNRT): fell 4%

Shipping companies account for 19.7% of the Guggenheim Shipping ETF (SEA). SEA fell 2% in week 23. Investors who are interested in a broader exposure to the industrials sector can invest in the SPDR Dow Jones Industrial Average ETF (DIA).

Series focus

We’ve looked at tanker stock performances in week 23. Next, we’ll see which tanker performed better that week. We’ll also look at the cost side of the tanker industry by reviewing bunker fuel costs. Finally, we’ll see how analyst sentiments have changed in week 23, followed by consensus analyst ratings for all crude tanker companies.

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