- Shares in the heavily traded dry bulk shipping sector were a bit stronger Tuesday, apparently bolstered by a spike in shipping rates after two weeks of steady declines.
- Dry bulk, the raw-materials freighters of the global economy, often see their stocks respond, like an ultra-sensitive seismograph, to the minute movements of things like commodities prices -- anything, in fact, that might indicate an uptick in worldwide trade. The industry is especially dependent on Chinese steelmakers' use of Australian and Brazilian iron ore, which the bulkers haul across the oceans.
- According to the London-based Baltic Exchange, spot-market rates for the huge Capesize-class ships (the ones too big for the world's canals) popped nearly 6% Tuesday to $53,600 per day. That follows 13 straight days of declines. Helping the move upward: four Capesize vessels were booked Tuesday morning to haul ore from Brazil to steel foundries in China and Europe.
I learned long ago with the dry bulk shippers not to be too worried about the charts - they have a mind of their own. If the Chinese buy some more iron tomorrow these stocks can spike again; if not, then they can drop 10%. So the chart is only for entertainment purposes.
I will look to rebuy lower if and when; I won't short because charts are not respected in this group... more important is to know China's plan for chartering ships tomorrow.
Long Excel Maritime Carries in fund; no personal position