Dry bulk shippers and tanker companies have been feeling the heat as demand for their services has tumbled. Despite a nice July rally in equities, shipping stocks and related exchange traded funds (ETFs) may still have to endure a long period of suffering.

A lot of things are not going well for shipping companies. China, one the largest importers of raw materials, decided to curb its economic growth, and many dry bulk shippers are based out in Greece, which is an association no company wants to have.

According to the Economist, China’s imports of iron ore and coal in June fell by 6% and 8%, respectively. Measures to slow down growth in China have also caused prices for construction steel to fall by 17% since mid-April.

In addition, “the Baltic Dry Index—which measures the rates charged for chartering the giant ships that carry coal, iron ore and grain—has fallen by almost 60% in its longest streak of consecutive declines for nine years (34 days running as of July 14th).” [Resurrection of SEA.]

In late May, it cost $48,000 to charter a large ship. Today, the rate is down to around $18,000.

It’s clear that the commodities and shipping industry are suffering. What is unclear is “whether the index is saying more about the supply of ships than the demand for their cargoes.”