I want to recommend a recent article that captures not only Dryships but an overview of the outlook for the sector.
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Article : DryShips’ Balanced Approach Will Help It To Offset Spot Price Volatility
Author Marsha Robe
Date March 7,2014
DryShips (DRYS) is feeling the impact of falling dry bulk shipping spot rates. Year to date, the company’s stock price has fallen around 4% due to lower spot prices. However, the situation is going to improve after March, this year because dry bulk commodities’ demand will increase in coming quarters.
Global dry bulk shipping market scenario
2013 was a good year for dry bulk shippers, as dry bulk commodities’ shipment volume increased by 5.4% over 2012. However, in the first quarter of this year, dry bulk commodities’ shipment like iron ore, coal, steel, and grains in volume have dropped by 8.8% over last quarter, which has negatively affected the dry bulk shipping spot rates.
The Baltic and International Maritime Council (BIMCO) forecasted spot rates of different categories of vessels for first quarter of this year. Following is the forecast for three types of vessels that DryShips owns:
|Vessel Type||Feb/Mar Spot rates per day|
|Capesize Vessel||$4,500 to $10,000|
|Panamax Vessel||$5,000 to $11,000|
|Supramax Vessel||$7,000 to $11,000|
However, BIMCO expects that demand drop is due only to seasonal factors, and after the first quarter the market will recover. Overall, fundamentals are good for the dry bulk market, and the demand of various dry bulk commodities are expected to increase in coming quarters, which will push dry bulk shipping spot rates up.