SOURCE: Five Star Equities

Five Star Equities

January 18, 2012 08:20 ET

DryShips and Genco Shipping Navigate Choppy Waters in 2012

Five Star Equities Provides Stock Research on DryShips & Genco Shipping

NEW YORK, NY--(Marketwire - Jan 18, 2012) - The Shipping industry has struggled in the early stages of 2012 as ship supply continues to outpace commodity demand. Analysts warn that the shipping industry may be in for another bleak year, with RS Platou Markets saying in a report that its "expectations of fleet growth in 2012 surpassing demand growth will keep a cap on any major upside recovery to freight rates with our 2012 rate estimates for dry bulk markets slightly lower than the freight rate development in 2011." Five Star Equities examines investing opportunities in the Shipping Industry and provides stock research on DryShips, Inc. (NASDAQ: DRYS) and Genco Shipping & Trading Limited (NYSE: GNK). Access to the full company reports can be found at:

In the drybulk space, the Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in five months last week as a growing slowdown in cargo bookings hurt sentiment. "We see further weakness in the dry bulk market going forward as charterers continue to fix vessels at easier numbers in both Atlantic and Pacific and would expect the trend to remain weak through Jan-11 due to holidays and influx of 'late arrivals'; vessels scheduled for 2011," said Arctic Securities analyst Erik Nikolai Stavseth.

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As reported in The Financial Times, Capesize ships -- the largest kind that carry only iron ore and coal -- have seen the sharpest falls with the Baltic Exchange's Capesize index falling 43.2 per cent since December 12 to 2,115 points last week. According to the report from the Financial Times, the fall has brought average Capesize charter rates down from $32,889 on December 12 to $13,386 last week -- below many owners' total operating and financing costs.

According to a report last week from Reuters, growing ship supply, which is outpacing commodity demand, is set to cap dry bulk freight rate gains in the coming months, with economic uncertainty, a financing squeeze and a slowdown in China adding to headwinds.

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