A further pullback of capesize rates — although to still-frothy levels — helped deflate stock prices in the sector and pull down US shipping listings overall.
New York-listed dry bulk owners dropped an average 6% on the week, contributing to an overall decline of 2.1% by the companies under coverage of investment bank Jefferies.
This came as the S&P 500 registered a 1.8% gain and the small-cap Russell 2000 index a 1.8% advance. However, the Jefferies Shipping Index is still up 65.4% year to date and 54.2% year on year.
"Capesize spot rates fell 23% on the week on slowing iron-ore demand and cargo-splitting but remain above roughly $64,000/day," Jefferies lead shipping analyst Randy Giveans said.
"The Chinese government has asked steel producers in northern China to reduce production from mid-November until March in an effort to improve air emissions around the Beijing Winter Olympics. That said, the coal trade remains robust for all dry bulk carriers, and the 2022 FFA curve for capesizes has strengthened over the past few weeks."
The capesize slump appeared to affect dry stocks indiscriminately even as kamsarmax rates were rising 5.1% on the week to $36,584 per day and supramax fares 4.7% to $39,333.
For example, one of the week's biggest decliners was Connecticut-based Eagle Bulk Shipping, which fell 7.6%. Eagle owns no capesizes, with its fleet of 53 composed entirely of supramax and ultamax bulkers continuing to pile strength on strength.
Eagle may, however, continue to feel the effects of the divestment of one of its biggest and longest-standing shareholders, private equity's GoldenTree Asset Management, which elected to sell all 1.1m shares in early October.
Peer owners with capesizes units also took a tumble, with Genco Shipping & Trading shedding 10.2%, while SafeBulkers and Diana Shipping both slipped 6.1%.
The week's biggest loser at 10.4% was Navios Maritime Partners, which started out as a dry bulk owner. Through buys of sister companies Navios Maritime Containers and Navios Maritime Acquisition during 2021, it now has become a containership and tanker owner as well.
The week's biggest gain came from a tanker owner, with Belgium's Euronav piling on 6.4%. Euronav has become an investment target of the world's most famous shipowner, John Fredriksen, amid questions whether there could be consolidation potential with his Frontline.
Tankers as a sector lost 2% on the week on a pullback in VLCC rates. The week's only gainer was in boxships, which eked out a 1% rise. LPG owners dropped 3% and LNG owners 1% despite raging LNG prices.
