The Ripple Effects of Earnings Volatility

The ripple effect of a sharp 45% drop in Capesize bulk carrier earnings this October is reverberating across the dry bulk universe.

Capesize earnings are a critical driver for several related shipping investment positions, each with varying correlations to the fluctuations in the vessels’ earnings. Everything from forward freight agreements (FFAs) to shipping stocks like Seanergy (SHIP) and Golden Ocean (GOGL) are coming under pressure.

The value of Capesize vessels hasn’t dipped yet, but if the drop in earnings continues, it is likely only a matter of time.