Navios Maritime Holdings Inc. (NM)

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Sector Snap: Drybulk leaps as index hits record
Thursday May 15, 1:20 pm ET

Drybulk shippers jump as a key shipping index hits all-time high, with biggest 1-day gain


NEW YORK (AP) -- Investors flocked to the drybulk sector Thursday, as a key shipping index set an all-time high amid increasing activity for the vessels that carry commodities including iron ore, coal and grain.

The Baltic Dry Index, which measures drybulk shipping rates on 40 routes across the world, soared 418 points Thursday to close at 11,067 -- its highest point since mid-November of 2007. The increase marks the biggest leap ever for the index. The largest drop was 443 points in mid-January.

The index is managed by the Baltic Exchange in London.

Dahlman Rose analyst Omar Notka said the 2009 contract rate for Capesize vessels -- the largest drybulk ships on the seas -- has leaped 15 percent in just the past two days. Rates for the vessels on the spot, or unchartered, market topped $200,000 Thursday, he said.

Capesize vessels are so named because they are too big to fit through the Panama or Suez Canals and must instead navigate the Cape of Good Hope or Cape Horn to travel between oceans.

Demand for Panamax vessels, the largest drybulk carriers that can fit through the locks of the Panama Canal, is also booming.

Notka continues to assert that demand for drybulk vessels will remain strong through next year, as steel prices continue to climb.

In afternoon trading, shares of DryShips Inc. leaped $5.71, or 5.8 percent, to $104.75. Diana Shipping Inc. added $1.77, or 5.1 percent, to $36.70.

Excel Maritime Carriers Ltd. gained $1.70, or 3.4 percent, to $52.36, and Genco Shipping & Trading Ltd. rose $2.11, or 2.6 percent, to $82.28.

Euroseas Ltd. added $1, or 6.9 percent, to $15.50, while Navios Maritime Holdings Inc. rose 37 cents, or 2.7 percent, to $14.26.

Danaos Corp. gained 61 cents, or 2.4 percent, to $25.77 and Eagle Bulk Shipping Inc. rose 26 cents to $34.76.