Capesize spot rates have stormed to the $20,000 a day level this week with analysts confident the rally can continue in the coming months.
A tight tonnage situation in the Atlantic basin has led the spur in fortunes for large bulkers. Spot Brazil-to-China capesize rates on Thursday rose to $17.25 per metric ton, after averaging $12.10 in July.
“Increased Chinese steel prices have pushed iron ore prices and demand up. The cape fleet growth is diminishing and with a strong demand for Brazil loaders, the available spot tonnage have been limited,” broker Fearnleys noted in its latest weekly report.
Another broker, Allied, noted the current tight tonnage lists in all regions at the moment.
J Mintzmyer, lead researcher at US-based Value Investor’s Edge, picked out Genco and Seaenergy as stocks to invest in given the current dry bulk uptick.
“We believe the supply/demand dynamics are finally lining up well for the dry bulk industry after nearly a decade of poor returns,” Mintzmyer told Splash.
“Genco is one of the best positioned firms in the dry bulk market with a clean balance sheet and strong operating leverage. Seanergy is more risky, but they are printing money in these markets. There’s potential for the stock to nearly double in just a few days if the current trends continue,” Mintzmyer maintained.