NEW YORK ( TheStreet) -- 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 TheStreet. 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. Excel Maritime ( EXM) -- 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 DryShips ( DRYS) (eight vessels) and Genco Shipping & Trading ( GNK) (nine vessels). "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 TheStreet. 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.
Shares of DryShips were at $2.76, up 10 cents, or 3.8%. Eagle Bulk Shipping ( EGLE) was popping at $1.77 a share, up 13 cents, or 7.9%. Genco Shipping was at $8.34, up 57 cents, or 7.3%. State-controlled China Cosco Holdings jumped 5.2% on the Hong Kong Stock Exchange on Tuesday, three weeks after the company
threatened to halt payments for its vessels to the shipowners. Shortly afterwards, Cosco reversed its decision and agreed to fulfill its contracts. -- Written by Joe Deaux in New York. >To submit a news tip, send an email to: email@example.com