(Dry-bulk shipping item updated to correct a misreported company name. Safe Bulkers announced an equity offering Monday, not Star Bulk Carriers.)

NEW YORK ( TheStreet) -- Shares of DryShips ( DRYS) were among the losers in the dry-bulk-shipping sector Monday, as stocks fell across the board on another bout of worrying that China may make further moves to tighten up its monetary policy.

That could have a dour effect on demand for the services of merchant ships carrying raw materials to China's booming economy, which comprises a large portion of the dry-bulk sector's business. Complicating matters are the ongoing iron-ore price talks between the world's biggest mining companies and Chinese buyers.

The miners are expected to jack prices by 60% or more and to press for quarterly contracts as opposed to annual.

Still, many industry observers believe that investors overreact to the day-to-day changes in the demand outlook for seaborne freight transport.

DryShips' stock, the most liquid and most volatile name in the group, declined 25 cents, or 4%, to $5.92.

Safe Bulkers ( SB) shares also fell sharply, pacing the decliners Monday, as investors reacted to the coming dilution caused by a 9-million-share stock offering. The company, which announced the sale Monday, said it plans to use proceeds from the issuance to expand its fleet and pay down debt.

Shares of the Athens-based bulk-carrier owner ended Monday's session down 43 cents, or 5%, at $8.24.

Despite the jittery equities markets, freight rates for dry-bulk cargoes continued to strengthen on Monday. Last week, European coal demand drove a number of ship fixtures. Meanwhile, strong prices for Chinese steel meant strong demand for iron ore which meant strong demand for the ships that carry it. The going spot rate for a capesize ship, on average worldwide, rose to nearly $43,000 a day, up 14% from a week ago, according to the Baltic Exchange, the London-based shipbroker that tracks cargo rates.

The shipping industry remains divided between bears and bulls, however. The former think so many new ships are scheduled for delivery this year that dry-bulk rates will inevitably sink. The latter believe that a global economic recovery, and continued raw-materials consumption by China, will be enough to absorb however much new supply comes out of the world's shipyards and onto the world's oceans.

Among other dry-bulk names Monday, shares of Diana Shipping ( DSX) declined 2.6% to $14.50, Eagle Bulk Shipping ( EGLE) shed 3.4% to $5.63, and Excel Maritime ( EXM) dropped 2.2% to $6.28.

Genco Shipping and Trading ( GNK), meanwhile, lost almost 4% to $21.64. Shares of the Genco-backed Baltic Trading ( BALT), which went public last week, closed the session at $13.88, down 2% and below their offer price of $14.

-- 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.

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