This weekend in Argentina at the G-20 Summit, President Trump and Chinese President Xi agreed to delay the January 1 round of 25% tariffs on Chinese imports by 90 days, giving the two trading partners time to work through a more comprehensive trade deal.
In the world of publicly traded transportation and logistics companies, dry bulk carriers—maritime companies that move commodities like minerals, metals, and grains—are today’s biggest winners on the news. This makes sense: Stifel analysts said that dry bulk carriers were among those companies most exposed to tariff shocks, as barriers to international trade, especially the trade of agricultural products, depressed commodity values and altered lanes.
This may be a case of a short-term market reaction to Trump and Xi kicking the can down the road. It’s also possible, however that investors are now taking seriously the upside risk of a new trajectory in American trade policy, one where both the U.S. and China are driving toward a rational, predictable partnership instead of increasing escalation.
When trading closed on Monday, the S&P 500 was up 1% on the day. While truckload and LTL stocks continued their selloff and 3PLs muddled through, mostly underperforming the market, dry bulk carriers made more impressive gains. Diana Shipping (NYSE: DSX) gained 1.74%, Scorpio Bulkers (NYSE: SALT) climbed 3.52%, Safe Bulkers (NYSE: SB) popped 7%, and Star Bulk Carriers (NASDAQ: SBLK), the largest publicly-traded dry bulk fleet, rose 5.12%.
In an era of slowing Chinese industrial growth (January-September Chinese exported steel volumes down 10.7% YOY) and dry bulk vessel spot rates sideways over the past year, there haven’t been many positive factors for the segment.