US analyst Morgan Stanley has upgraded three bulker owners as it sees a continuing recovery in the market.
It said freight rates have been lagging 30% behind steel prices, giving owners a potentially big upside by 2019 in a sector driven by strong production fundamentals and muted fleet supply.
It is expecting a 2.5% compound annual growth rate in shipping demand over the next two years
"The dry bulk market has passed through its cyclical lows and is headed toward profitability, driven by slowing fleet supply, strong commodity prices and high steel margins, growing Chinese infrastructure spend, the growing dependency of China's steel industry on imported ore due to falling output and shutdown of induction furnaces that melt scrap, and ton-mile expansion from...
