Can commodity prices affect the stock market returns of dry bulk shipping companies?

We explore the relationship between the returns of 64 dry bulk shipping company stocks’ prices and the main 15 commodities that bulk carriers transport. Using a principal component analysis to reduce the dimensionality of the commodities dataset and a panel estimator, we find that a change in the commodity price principal component, would result in a 0,06% change in the returns of the shipping stock prices. Minerals appear to have a stronger impact, as a 1% change in the minerals principal component results in a 0.1% change in the returns. This is mainly due to the fact that minerals account for larger trade volumes in the dry bulk market and they employ mostly bigger vessels. Finally, we show that the price of Brent oil is also an important factor when it comes to shipping stock prices