NEW YORK (TheStreet) -- Dry-bulk shipping stocks were mostly higher Tuesday -- in tandem with a surging broader market lifted by positive manufacturing data -- even as dry-bulk freight rates continued a two-week skid.The world's merchant marine industry -- at least the executive and financier classes of that industry, rather than the knot-tiers and mast-climbers and engine-room denizens -- is still sleeping off its hangover following the end of its biannual trade show in Athens, called Posidonia. That, combined with the three-day "Dragon Boat" holiday in China, has led to a slackening in chartering activity, some maritime market watchers say. Further, a months-long logjam in key iron-ore ports in Australia, China and Brazil has eased, said Jeffrey Landsberg, whose Commodore Research advisory shop tracks the dry-bulk cargo market. As traffic congestion in harbors breaks up, more ships are released into the market, increasing supply. Another thing hurting rates: Iron-ore prices that have declined over the last few weeks, which many investors interpreted as a signal that China's recent moves to tighten credit for fear of a real estate bubble had finally come home to roost. The going rate for a Capesize vessel, the largest dry-cargo haulers on the oceans, fell to about $37,000 a day Tuesday, down 23% from last week and well below a year ago, when the same type of ship fetched more than $80,000 per day on average, according to the Baltic Exchange, the London-based ship broker. The firm's overall Baltic Dry Index, which tracks freight rates across a range of dry-bulk-vessel sizes, stood at 3,020 on Tuesday, down 3% from Monday and 15.6% for the week. The sharp declines come after a heady run-up in rates during the spring. Capesize day rates touched $59,000 on June 2 -- their highest point in 2010. "A year ago, no one thought capes would come close to that level, because of the orderbook," Landsberg said, referring to the huge number of brand-new ships slated to come into service this year from shipyards around the world. Many industry insiders fear that the size of the worldwide fleet will increase and bring freight rates down.
Bullish players -- mostly shipowners or the CEOs of publicly traded shipping companies with stock to sell -- believe that enough of the orderbook will be canceled that vessel supply won't increase enough to hurt rates. If share prices in the dry-bulk shipping sector are any indication, equities investors don't believe the bullish ship owners. The stocks have underperformed the broader market so far this year. While the S&P 500 is basically flat for 2010, most of the seven largest publicly traded dry-bulk companies by market cap have seen their shares slowly retreat. Genco Shipping & Trading ( GNK - Get Report) has lost 27% of its value (though it's an outlier on the negative side), Eagle Bulk ( EGLE - Get Report) 7%, Excel Maritime ( EXM) 16%, Diana Shipping ( DSX - Get Report) 14%, Navios Maritime ( NM) 8%, Safe Bulkers ( SB) 16%, and DryShips ( DRYS) -- which has had a rather unique problem with its drillships energy exploration business -- has dropped 30%. On Tuesday, all of those stocks were in the green. DryShips paced the gainers, adding 4.2%, while Genco rose 4.1%, and Excel 3.7%. Diana's shares, meanwhile, inched higher by 1%. Navios gained 3.4%, and Safe Bulker 3%. -- Written by Scott Eden in New York