Dry bulk shippers' record run is set to continue for at least another year, helped by China's insatiable appetite for iron ore and coal, and port congestion in Brazil and Australia.
Their performance, from profits to share price, is likely to be further boosted by a rise in freight rates and a shortage of vessels. Port congestion, which increases the number of billable days, is also not expected to ease in the short-term.
'The demand simply surpassed the available supply out there. It is pretty much supply and demand in its purest form,' Gregory Lewis, senior shipping analyst with Credit Suisse said.
This mismatch is expected to keep freight rates for shipping dry bulk commodities firm.
"You have a near vertical demand curve that starts meeting the near vertical supply curve and that's when the rates can just sky rocket," said the head of International Maritime Exchange's Houston research desk Mike Reardon.
"If you can look at a year out on demand to see if it is going to be the same or stronger, then the market looks pretty good on that basis," Mr Reardon added.
Demand from the world's fastest growing large economy is expected to sustain the strong performance of dry bulkers.
China's iron ore imports are likely to rise by more than 10 per cent in 2008, from an estimated 370 million tonnes in 2007.
This requires a significant addition to the number of large dry bulk vessels currently sailing the seas.
"The increased imports, 2007 over 2006, in China alone require the employment of an additional 66 capesize bulk carriers in 2007," said George Economou, chairman and chief executive of DryShips in a conference call with analysts on Nov 7.
Capesize vessels are the largest dry bulk ships, carrying cargo like iron ore and coal.
Profit for the three quarters to September at DryShips Inc - the largest US-listed dry bulk carrier by market capitalisation - shot up more than 13 times, while that of Navios Maritime Holdings Inc tripled from last year.
The shares of dry bulk shippers have also been on a roll.
DryShips stock soared 385 per cent and Navios is up 182.50 per cent so far this year before last Friday's price movement.
Similarly, Genco Shipping & Trading Ltd zoomed 100.5 per cent and Diana Shipping Inc is up 94.4 per cent.
The broader S&P 500 Index is up by about 2.3 per cent, while the Nasdaq Transport Index , which also includes land and air transport companies, has risen about 7 per cent so far this year before last Friday.
Average day rates for dry bulk carriers are expected to go even higher from current levels.
"Iron ore inventories at Chinese ports are tight, covering roughly 30 days of current consumption. In addition normal winter upside ... could lead to further day rate upside," Bear Stearns analyst Scott Burk wrote in a research note to clients.
The Baltic Dry Index , a measure of shipping rates for commodities on different routes and ship sizes, hit a record high last Tuesday and is up about 147 per cent this year.
Port congestion at key commodity exporters like Brazil and Australia is further fuelling billing rates. While the port themselves may have the berths to handle the traffic, infrastructure bottlenecks in moving cargo in and out of the ports leads to ships queuing up.
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