NEW YORK (
) -- Dry-bulk shipping shares were soaring Tuesday as month-and-a-half-long demand for capesize dry-bulk shipping vessels continued on a spike in global demand for coal and a China's appetite for iron ore.
Capesize vessel rates have jumped to $28,650 a day from the Aug. 15 price of $11,000 a day, Jeffrey Landsberg, founder of Commodore Research, told
. That's a 160.1% increase in six weeks.
High volume of Chinese steel-making has driven the country's demand for greater amounts of iron ore, the majority of which has been taken from Australia, Brazil and, to a lesser extent, India. India had played a larger role in iron ore mining, but
a major corruption scandal recently rocked the country's industry
and resulted in the shuttering of all companies in the mining region of Karnataka, India.
Though Karnataka is a major port for Panamax vessels and doesn't rely heavily on Capesize business, Landsberg said that Panamax, Suezmax and other smaller vessels have also seen an uptick in daily rates.
-- which rose 11%, or 23 cents to $2.33 a share, leading stocks in the industry -- owns and operates seven capesize ships, which is a solid number when compared to its larger competitors
(DRYS - Get Report)
(eight vessels) and
Genco Shipping & Trading
(GNK - Get Report)
"I think the shippers are moving on the back of a good tape today [Tuesday] and the fact that the BCI [Baltic Cape Index] has been quite healthy as of late," Natasha Boyden, shipping analyst at Cantor Fitzgerald, told
Landsberg said that capesize rates have leveled off in recent days, which he said could mean that more people are starting to think that vessel supply has returned to some sort of balance for the time being.
Though market volatility has led to uncertainty in global equity markets, commodity demand has remained strong, which could bode well in the short-term for dry bulk carriers who have battled
underperforming profits because of too many ships