Bloomberg News

Eagle Bulk, Excel Fall as Rates Have 2nd Weekly Drop (Update1)

March 20, 2009

Eagle Bulk Shipping Inc. (EGLE:US) declined 17 percent and Excel Maritime Carriers Ltd. fell 14 percent as weakening demand for iron-ore and grain shipments sent shipping rates to their second straight weekly drop.

Eagle Bulk fell 80 cents to $4.01 in Nasdaq Stock Market composite trading. Excel dropped 66 cents to $3.97.

The Baltic Dry Index (BDIY), a measure of shipping costs for commodities, fell 16 percent to 1,782 points this week, according to the Baltic Exchange. Daily rates for Panamax-class vessels, the largest to transit through the Panama Canal, fell 2.2 percent today to $11,804 and are down 32 percent this week.

“Panamax rates continue to see further pressure on slowing grains fixtures,” Omar Nokta, an analyst at Dahlman Rose & Co. in New York, said in a note to investors today.

Genco Shipping & Trading Ltd. (GNK:US) fell $1.64, or 12 percent, to $11.98. Diana Shipping Inc. (DSX:US) declined $1.20, or 8.9 percent, to $12.34. DryShips Inc. (DRYS:US) lost 83 cents, or 16 percent, to $4.49.

Iron-ore inventories in China have climbed 5 percent this year as domestic prices of hot-rolled sheet, a benchmark steel product, have dropped 14 percent.

Chinese iron-ore imports in February exceeded steel production for the first time since December 1994, “which will likely set the stage for a near-term drop in iron-ore imports in the coming months,” Justin Yagerman, an analyst at Wachovia Corp. in New York, said in a note.

Yagerman recommended investors avoid dry-bulk stocks for the immediate future. He said iron-ore negotiations between Chinese steel mills and producers including BHP Billiton Ltd. (BHP) and Cia. Vale do Rio Doce will drag into April as China uses its iron-ore inventories as “significant leverage” to win favorable prices for shipments.

To contact the reporter on this story: Todd Zeranski in New York at tzeranski@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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Companies Mentioned

  • EGLE
    (Eagle Bulk Shipping Inc)
    • $16.43 USD
    • 0.31
    • 1.89%
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