Eagle Bulk, Excel Fall as Rates Have 2nd Weekly Drop
Eagle Bulk Shipping Inc. (EGLE) 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) fell $1.64, or 12 percent, to $11.98. Diana Shipping Inc. (DSX) declined $1.20, or 8.9 percent, to $12.34. DryShips Inc. (DRYS) 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.
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