Has the Baltic Dry Index hit bottom?

Bloomberg reported that the Baltic Dry Index may have seen its bottom and might be on the way back up.  This would be neutral news for Safe Bulkers Inc. (SB) because 79% of their ships are rented out already for 2011.  Their fleet, including newbuild vessels still under construction, are over 50% rented out for 2012 and 2013.
 
 
I don't think that the Baltic Dry Index has seen its bottom yet.  China's real estate/construction bubble has not burst yet.  When it does a lot of dry bulk ships are going to have to find new renters with new cargos.  Dry bulk shipping prices will drop.  That's when Safe Bulkers will shine because it has long term contracts with several customers.
 
Disclosure:  I don't own Safe Bulkers right now.
 
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Published in: on February 12, 2011 at 10:31 pm  Leave a Comment  

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