NEW YORK ( TheStreet) -- Dry-bulk shipping stocks ended trading mostly lower Tuesday -- with one of the lone exceptions being fan-favorite DryShips (DRYS - Get Report), whose shares climbed 2% -- as the volatile sector cooled off after a wild ride the last few weeks.
Dry-bulk shipping rates appear to have moderated following a heady run-up throughout most of November. On Tuesday, the Baltic Dry Index, which tracks spot-market rates across all vessel sizes, fell 2%, while the average capesize rate slipped by 3% to below $80,000 a day.
A week ago, some bookings on the spot market for capesize ships -- the biggest dry-bulk carriers on the high seas and the ones primarily responsible for bringing iron ore to the frantic steel mills of China -- surged above $100,000 a day, the highest prices fetched since before the crash last fall.
Continued robust demand from China for raw materials (induced by the country's stimulus) had fueled the November spike in rates, which one analyst called a "booking frenzy," with giant mining concerns competing to hire ships like city-dwellers hailing cabs on a rainy day. The fallout from that frenzy continues: major dry-bulk ports remain seriously congested, which some analysts believe will provide at least some "support" for shipping rates over the near term, since port congestion takes supply off the market.Driving the run-up in dry-bulk shipping rates, however, has been a strengthening in Chinese steel prices -- though they did decline a bit at the end of last week -- an indicator that buttresses sentiment in the capesize market. As long as steel prices are going up, so too will demand for the ore that feeds the furnaces, or so the logic goes.