Sector Wrap: Drybulk index hits another high

The Baltic Dry Index, which measures drybulk shipping rates on 40 routes across the world, leaped 392 points Friday to close at 11,459. The index made its biggest jump ever -443 points -just a day earlier and eclipsed a previous all-time high of 11,039 set in mid-November. The index is managed by the Baltic Exchange in London.

Among the largest gainers were Excel Maritime Carriers Ltd., which rose $4.18, or 7.8 percent, to $57.72; and Euroseas Ltd., which added $1.30, or 8.4 percent, to $16.80.

Drybulk ships have been in high demand as China and emerging nations import massive cargos of iron ore and coal to make steel, and require cement, construction and agricultural products.

But demand was slowed in the first quarter by iron ore price negotiations in China and flooding that led to coal production slowdowns in Australia and South Africa.

Jefferies analyst Douglas Mavrinac said the index's two-day surge can be attributed to the ramp-up of iron ore production in Australia, as well as an "emotional" response to the massive earthquake earlier this week in China.

Mavrinac said that some speculation is brewing that the damage from the earthquake may require the Chinese to import more agricultural products to account for damaged crops, and construction materials as the rebuilding process begins.

"It's adding a little bit of tightness to an already tight market," he said.

Other gainers were DryShips Inc., which leaped $4.24, or 4 percent, to close at $110.74, and Diana Shipping Inc., which added $2.40, or 6.6 percent, to $39.