Bulk Shipping’s Exciting Outlook

• This article offers a macro analysis on bulk shipping, a sector I believe to have a very promising near future.
• Recent rates have been showing impressive improvements, as shown by a current 3 year high of dry bulk shipping index, or “BDI.”
• Many drivers of future growth discussed for a variety of bulk commodities.
• Discussion on the current dry bulk shipping fleet as well as the outlook for fleet growth.
• After 7 bad years, bulk shipping companies are finally expected to experience strong years ahead.

Note: This article was released to members of Cash Flow Kingdom last week in partnership with Darren McCammon’s “Investments for a Booming Economy Series.” Other reports in this series are, “Pennies From Heaven, which covers an alternative bond opportunity related to the JC Penny Trust, coverage of Hersha Hospitality REIT and container shipping firm Seaspan.”

There has been a lot of attention given to shipping names on Seeking Alpha, but hardly any mention of bulk shipping companies (at least not legitimate ones). This is remarkable, because there are quite a lot of them, and most have been stellar performers during the past year. I think this is because the sector has been in severe distress for no less than seven years, has performed very weakly, and currently pays no dividends. However, I believe the outlook is very promising for this sector, and performances of these firms should materially improve going forward. These improvements should result in institution of dividends in 2018. I believe there is significant upside for bulk shippers, especially in a booming economy. In this article I first present a macro view on bulk shipping, and then next week I will highlight my personal number one investment idea in this sector.

Dry bulk ships are used to ship goods that can be transported in bulk. The most important bulk trades are iron ore and coal, but there are many more cargoes as shown below.