BDRY Up Another 6%

The Breakwave Dry Bulk Shipping ETF (BDRY) increased by 6% this week. It reached an all-time high of $42.22 on Wednesday before ultimately finishing the week at $39.23. Sentiment has been volatile this week but spot freight rates remain very strong.

As we discussed in our client note earlier this morning, China has returned from Golden Week showing strength today. Steel prices in China are up by approximately 1.5% from before the holiday. Thermal coal prices are up by approximately 9% and have set another record. Coastal coal freight rates are up by approximately 29.5%. In addition, the Evergrande situation has still not had any tangible impact on spot commodity demand or the shipping market, and it remains clear in our view that the government does not want a sudden collapse in the housing market and will continue to work on fostering more moderate growth. Also of note is Chinese equity prices have risen by approximately 1% and SHIBOR lending rates have been lowered. Finally, of note in the electricity market is that the State Grid has reported that from October 1- 6, average daily electricity generation increased year-on-year by approximately 16%. Sentiment in global equity markets and commodity markets remains jittery over China, but China is actually showing significant strength. These issues will be discussed in greater detail in our next Weekly Dry Bulk Report and Weekly China Report.

Source: Commodore Research & Consultancy