Drybulk shipping stocks and a related exchange traded fund (ETF) soared today. After the sector has struggled with a global economic crisis, what’s going on?
Much of the leap was based on news of a possible Chinese stimulus package, says the Associated Press. Investors hope such a package would prop up manufacturing and infrastructure spending.
Transports of iron ore and steel to and from Australia and China are the major uses for Capesize vessels (so named because they are too big to get through canals and must instead go through the Cape of Good Hope or Cape Horn to get between oceans).
Rates for Panamax vessels (which can fit through the Panama canal) have jumped 30% this week.