(Updated to include closing stocks prices throughout, as well as background on the dry-bulk shipping sector.)
NEW YORK (TheStreet) -- Shares of dry-bulk shipping concerns advanced sharply Wednesday, gathering steam near the end of the session, as daily rates for their services continued to strengthen, pushed higher by China's demand for raw materials.
The going fee for a capesize vessel on the spot market, according to London's Baltic Exchange, the ship broker, jumped 4.6% to $67,385 Wednesday. That's down sharply from the more than $90,000 per day that these humongous ore haulers were fetching in July, but is still more than double the going rate of just two months ago. The Baltic Dry Index, which tracks the daily changes in rates for all sizes of drybulk carrier, from capesize on down, rose 3.7% Wednesday to 3,748.
The reason for the shipping-rates rally? The Chinese, of course, whose mills continue to churn out steel at a near-record pace. In October, according to data released by China's government Wednesday, the Chinese steel industry produced 1.67 million metric tons of the stuff per day, up 44% from the same period a year ago.Iron-ore imports, meanwhile, jumped 50% in October compared with a year ago, though the level did decline by about 30% from September's brisk pace. Nonetheless, with the world's third-largest economy growing, observers feel that ore imports will remain robust over the next month or so, especially as steel mills draw down further on the enormous ore stockpiles accumulated during a raw-materials buying binge in the spring and early summer of this year. Further evidence of the increasing demand for ore cargo space came Wednesday morning, when two capsizes were booked for routes between Australia and China at a rate of $17.50 a ton, up from $16.50 on Tuesday.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV