SOURCE: Five Star Equities

Five Star Equities

February 25, 2013 08:20 ET

Shipping Rate Projected to Nearly Triple by 2015 as Fleet Growth Begins to Slow

Five Star Equities Provides Stock Research on DryShips and Eagle Bulk Shipping

NEW YORK, NY--(Marketwire - Feb 25, 2013) -  The shipping industry has performed admirably to begin 2013 after being plagued by oversupply in 2012. The Guggenheim Shipping ETF (SEA) has gained 4.4 percent year-to-date. Five Star Equities examines the outlook for companies in the Shipping Industry and provides equity research on DryShips Inc. (NASDAQ: DRYS) and Eagle Bulk Shipping Inc. (NASDAQ: EGLE).

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The Baltic Dry Index (BDI), a measure of costs to ship dry-bulk commodities such as grain, coal and iron ore, in 2012 posted its lowest average in 26 years. The BDI on Friday had a reading of 745, an increase of 16 percent when compared to the 26 year low seen on Feb. 1, 2012, according to data from Bloomberg. RS Platou Markets predicts shipping rates for Capesize vessels will average $11,000 a day in 2013, $19,000 a day in 2014, before nearly tripling to $30,000 by 2015.

"The slowing trend in fleet growth during the course of the year should create some upside potential for improving fundamentals in the second half of 2013," Platou said.

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DryShips owns a fleet of 46 drybulk carriers with a combined deadweight tonnage of approximately 5.1 million tons and 10 tankers with a combined deadweight tonnage of over 1.3 million tons. The company is scheduled to release results for the fourth quarter and full year 2012 on Wednesday, February 27th. Shares of DryShips have gained over 20 percent year-to-date.

Eagle Bulk Shipping is a leading global owner of Supramax dry bulk vessels that range in size from 50,000 to 60,000 deadweight tons and transport a broad range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes. The company is scheduled to release results for the fourth quarter and full year 2012 on Monday, March 11th.

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