• 2013 January 15 18:40

    Shipping ETF sails higher as Baltic Dry Index rebounds

    The Baltic Dry Index gained notoriety before and infamy during the global financial crisis. Few investors realize the Baltic Dry Index has existed, in some form, for nearly 200 years. After the index garnered almost everyday mentions in the mainstream financial press during the crisis, it is fair to say at least few investors know it is a gauge of the costs of shipping various raw materials around the world, Benzinga reports.
    The index measures daily charter rates for pricing on Handysize, Supramax, Panamax, and Capesize dry bulk carriers that haul an array of commodities such as coal and iron ore. Said another way, the Baltic Dry Index itself is not a tradeable security, but it can be a good gauge of risk appetite.
    And since the Baltic Dry Index (BDI) cannot be traded, investors can turn to the Guggenheim Shipping ETF as a way of expressing their views on the global shipping sector. The Guggenheim Shipping ETF, does not track the BDI. Rather, the ETF's underlying index is the Dow Jones Global Shipping Index. Still, the fund is home to 26 shipping, many of which are impacted by the daily charter rates that are derived from the BDI.
    Last year, SEA and its constituents dealt with a global a supply glut, among other issuers. Predictably, that weighed on the ETF and sent the BDI from around 1,165 in July to 750 in December.
    The new year has brought better performances for both BDI and SEA. Year-to-date, the index has gained 8.73 percent, according to Bloomberg data. Indicating that SEA and the BDI are not perfectly correlated, the ETF is up "just" 3.72 percent to start the year, but SEA's rally started before 2013 was rung in. SEA has trending higher for several months and is up 12.5 percent in the past 90 days.
    Buoyed in part by rising iron ore prices, a direct result of China's improving economy, rates for Capesize vessels are approaching $5,000 per day. Those are the vessels that ship coal, iron ore and related fare.
    There is speculation that Chinese iron ore supplies have dwindled to multi-year lows, which should be good news for SEA. However, there is a cautionary tale to acknowledge with this ETF. SEA is not entirely correlated to dry bulk demand. In fact, the ETF is more of an energy play as some of its constituents such as Frontline and Nordic American Tanker are oil tankers or shippers of liquefied natural gas.
    SEA's exposure to shippers of energy commodities could mean one of two scenarios could play out. Either the ETF is acting as a forward-looking indicator and has started to price in robust global oil demand this year and the fund will surge further. Or the fund has risen in anticipation of higher oil demand and if that demand does not materialize, the ETF is likely to falter yet again.
    Something else to consider before setting sail with SEA. The types of vessels operated by the ETF's constituents use what is known as bunker fuel. Knowing exactly what bunker fuel is not necessary, but knowing the price has noticeably risen over the past seven months is.
    Bottom line: Undoubtedly, SEA and its constituents are in better shape today than they were in 2009. They are probably better off than they were for the bulk of 2012 and the ETF has the potential to continue its bullish ways if global commodities demand supports a move to the upside. That said, small positions are perhaps the best way to participate in this ETF over the near-term.


2024 November 12

18:06 Iraq shortlists 11 firms for Grand Faw port operation, decision in January 2025
17:42 ZeroNorth and Vitol launch digital bunker trial in port of Rotterdam
17:24 LR MDH joins call to accelerate adoption of zero-emission fuels by 2030
16:41 Port of Rotterdam Authority sets tariffs for the next three years
16:25 Vitol Terminal Latvia introduces new aniline transshipment service
15:45 UECC and Daphne Technology join forces to drive advanced emissions monitoring on UECC’s latest vehicle carrier
15:18 Seatrium inks LoI for a Heavy Lift Vessel for Japan’s wind market
14:55 Silverstream and Yiu Lian Dockyards (Shekou) sign MoU to drive Silverstream® System installations
14:13 AD Ports Group delivers record revenue of AED 4.66 bln and total net profit of AED 445 mln in Q3 2024
13:44 BAR Technologies signs an agreement with WindWaves to manufacture new 20 and 24 metre WindWings
12:31 Sanmar delivers powerful escort tug to P&O Maritime Logistics
11:40 e1 Marine and STAX Engineering partner on innovative barge-based emission capture and control project
11:00 New Yangzi Shipbuilding delivers SEASPAN's 12th dual-fuel medium-sized container ship
10:31 Van Oord completes major dredging project in Egypt
10:03 Zhenhua Heavy Industries launched the world's largest piling vessel for CCCC Second Harbor Engineering Bureau
09:49 Telemar announces agreement to install and maintain Sealution’s shipboard data collection technology

2024 November 11

18:00 ADNOC Gas to buy 60% in Ruwais LNG plant
17:18 Strategic Marine signs contract with Mainprize Offshore for six new Supa Swath vessels, with options for six more
17:01 Hanwha Ocean wins 713.5 bln-won deal to build two LNG carriers for Maran Gas Maritime
16:35 One missing after MSDF vessel sinks due to fire off Fukuoka
16:05 Northern European ports in collaboration receive EU funding for onshore power for container ships
15:32 Maersk Tankers to deploy suction sail technology at scale to reduce CO2 emissions
15:12 CMA CGM's revenue up 38.5% to USD 15.8 bln in Q3 2024
14:45 DP World Australia announces acquisition of Silk Logistics
13:24 SAFEEN Group achieves Guinness World Record for most powerful electric tugboat
12:53 Höegh Evi to partner with SEMOP Port-La Nouvelle to develop strategic infrastructure for hydrogen import to France and Europe
12:08 ICTSI's Adriatic Gate Container Terminal hit 2 more milestones
11:24 Daito Corporation to build an electric tugboat
10:43 Hudong Zhonghua completes sea trial of LNG carrier built for Qatar Energy
10:20 CSSC Engine delivers China's first domestically produced methanol dual-fuel main engine
09:47 Hapag-Lloyd acquires German ship management company Hamburger Lloyd

2024 November 10

15:03 Keel laying ceremony marks the birth date of new ships for Scilly
13:44 Singapore is strengthening its position as a global hub for supply chain management (SCM)
12:13 ACP: Panama Canal could double the number of containers transiting
11:38 INOX India Ltd announces Q2FY25 Results
10:09 Chittagong port sees 13% fall in export container handling

2024 November 9

13:41 Montreal port employers threaten shutdown over labour dispute
12:49 China Merchants signs letter of intent with Brazilian port authority Portos do Parana
11:08 ZIM integrates Hoopo’s solar tracking solutions
09:52 Mexican terminal TMAZ welcomes arrival of MSC vessel

2024 November 8

18:00 Greece, Turkey to keep talking on maritime boundaries agenda
17:35 Montreal Port urges Trudeau government to end strike
17:24 Yangzijiang Shipbuilding receives 98 new orders this year
16:57 Utilizing Milbros UV Graphs improves chemical tank cleaning safety and turnaround
16:25 Transnet National Ports Authority pilots usage of cleaner fuels on its tugboat fleet
15:34 Wallenius Wilhelmsen exercise options for two additional 11,700 CEU Shaper vessels
15:02 IMO heads to COP 29 to promote net-zero framework for shipping
14:45 Fincantieri, VARD and Sandock Austral Shipyards form alliance around the Afrika Offshore Patrol Vessel
14:25 KOTUG’s SD Waalo begins maiden voyage under bp charter for LNG operations
12:43 QatarEnergy inaugurates four LNG vessels, the first from Korean shipyards
12:24 Fincantieri finalizes order with Crystal for a new high-end cruise ship
10:09 Friday Shipbrokers fix chartering project with Boskalis to transport car carrier to China for repair
09:20 ExxonMobil successfully supplies Hapag-Lloyd with B25 bio marine fuel blend in Antwerp

2024 November 7

18:00 Innovation Norway and Team Norway sign two agreements aimed at advancing sustainable maritime solutions
17:54 MABUX: Bunker price trends in the world's four largest hubs, Nov 4 - Nov 8, 2024
17:36 Konecranes expands emissions reduction ambition by committing to setting long-term, science-based net-zero targets
17:16 HD KSOE receives AiP from LR and LISCR for ammonia fuel-related equipment
17:08 ClassNK granted its “ELW (HP)” notation to bulk carrier “ROYAL LAUREL”
16:42 Equinor strengthens its position in the Norwegian Sea
16:24 Provaris Energy raises A$1.5 million to support hydrogen and CO₂ initiatives
15:56 Catator joins Ammonia Energy Association to accelerate adoption of ammonia for shipping
15:46 Scandlines wins innovation award of the German mobility industry
14:33 Flex LNG agrees to amend the existing time charter agreements for the two LNG carriers
13:41 ADNOC secures 15-year sales and purchase agreement for Ruwais LNG project
13:07 Three fugitive methane detection and measurement technology companies selected for feasibility studies
12:44 Irving Shipbuilding chooses TMC for Canadian patrol ships
12:24 ADNOC awards $490 mln contract to expand world’s largest 3D seismic survey
11:59 First Damen Shrimp Trawler 2607 completes sea trials
11:13 GTT receives an order from a Korean shipyard for the tank design of a new Floating Storage Regasification Unit
10:58 Hapag-Lloyd orders 24 LNG- fuelled boxships