NEW YORK (TheStreet) -- Dry-bulk shipping stocks fell sharply for the second straight session Wednesday.
Shipping day-rates declined once again, according to the Baltic Exchange, a London-based ship broker, with fees for capesize vessels, the biggest dry bulk transports that ply the oceans, falling to about $48,000 a day after surmounting the $50,000 level last week.
The sector's woes paralleled the selling pressure that has afflicted commodities-related stocks across the board, from miners of base metals to producers of steel. The big-three iron ore producers,
( RTP), all saw their share prices fall by more than 5% Wednesday.
Of course, equities markets declined worldwide after new-home sales data in the U.S. showed an unexpected drop, inducing another round of worries about the fragility of the global economy. Flight from risk caused the dollar to rise and commodities prices (and commodities stocks) to sink.
But some investors may fear that a slackening in demand for ore is developing after months of voracious buying by firms in China. Last month, the Chinese imported 65 million tons of ore, a record, while steel production in the People's Republic remained ultra brisk. Investors may be wondering how long all that can last, or simply noting that the Chinese iron-ore inventory is large enough to feed robust steel output for a long time to come.
Anthony Rizutto, a metals analyst at Dahlman Rose in New York, said in a note Wednesday morning that "prices may continue to moderate over the near-term." But, he added, "We believe that long-term fundamentals remain supportive of raw materials."
So well-documented is the notion that a huge number of newly built dry-bulk ships will be entering the market next year and beyond, leading to a potential glut, that market participants discounted this as a reason for the steep two-day drop in shipping stocks.
One of the leading dry-bulk decliners Wednesday was
Genco Shipping & Trading
, whose shares lost 5.7% to $19.60. The company reported its third quarter after Wednesday's market close, saying it earned $1.10 a share, exceeding analysts' profit targets by 9 cents.
stock, meanwhile, also lost 5.7% during the session after retreating 7.6% on Tuesday. The company, the first Greek dry bulk concern to go public in 2005 and the first to report third-quarter results this earnings season on Monday, surpassed expectations and reported a "clean quarter," in the words of one shipping-stock investor. The stock finished Wednesday at $6.01.
Elsewhere, shares of
gave up 5.5%;
retreated nearly 6.7%; and
declined by 7%.
The steepest drops were experienced by the smaller-cap names. Shares of
, an operator of smaller handymax and handysize vessels that transports a lot of grain, sank nearly 11% to $1.33.
( OCNF) shares broke a buck, falling nearly 9% to 89 cents, while
Star Bulk Carriers
lost 7.7% to $3.01 and
, fell nearly 8% on the day.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.