Sector Snap: Drybulk Shippers Sail

Monday April 7, 1:06 pm ET  

Drybulk Stocks Sail As Coking Coal Contract Signed, Soybean Strike Called Off, Index Rises


NEW YORK (AP) -- Shares of drybulk shippers leaped Monday, as a key shipping index rose and news of a coking coal contract spurred investors.
Dahlman Rose analyst Omar Notka said South Korea-based Pohang Iron and Steel Co., one of the world's largest steel producers, on Monday signed a coking coal agreement with Australian suppliers at prices more than double last year.

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And although iron ore negotiations remain "contentious," Notka said, strengthening steel prices should continue to boost drybulk vessel prices in the near future, and in turn, the sector's stocks.

Jefferies analyst Douglas Mavrinac added that a strike recently called off by Argentine farmers, which had been preventing soybean crops from reaching the country's ports, should spur soybean shipments and drive demand for the drybulk vessels to carry them.

Also Monday, Cantor Fitzgerald analyst Natasha Boyden lowered her 12-month price target and earning estimates on Eagle Bulk Shipping Inc. because of higher expenses. She reiterated her "Buy" rating on the shipper, though, citing the possibility of significant growth this year as the company re-signs vessels on new charters.

The Baltic Dry Index, which is managed by the Baltic Exchange in London and measures drybulk shipping rates on 40 routes across the world, rose 4 points Monday to reach 7,741.

In midday trading, Eagle Bulk Shipping Inc. rose $1.07, or 4 percent, to $27.53.

DryShips Inc. jumped $4.59, or 7 percent, to $70.26, and Diana Shipping Inc. added 78 cents, or 2.9 percent, to $27.77.

Navios Maritime Holdings Inc. gained 34 cents, or 3.3 percent, to $10.39, while Genco Shipping & Trading Ltd. surged $2.24, or 3.9 percent, to $59.91.

Excel Maritime Carriers Ltd. leaped $2.27, or 7.9 percent, to $31.11, and Quintana Maritime Ltd. rose 79 cents, or 3.4 percent, to $24.29.

Euroseas Ltd. added 28 cents, or 2.1 percent, to $13.71.