Is the shipping industry going through a bottoming phase?

Having noted the recent bankruptcy of South Korean shipping co Hanjin in September and subsequent announcement of a merger between Japan's three largest freight lining companies, it's pretty obvious that the strain seen in the shipping industry has taken on a new form with the resultant actions of these corporations pointing to a dire situation.

However there's been a fair amount of reaction to news feeding itself through that shows the optimism of traders awaiting signals of a rebound one of which was Donald Trump's surprise victory in the US presidential race that saw market's momentarily flummoxed in a blind-sided attempt to verify both the positive and negatives a Trump administration would bring to the world economy.

Trump's acceptance speech drew the most attention when he stated his intended purpose when taking office to start a program aimed at revitalising some of America's biggest inner cities in a bid to seek out growth the US had missed out on in these past years with the added benefit of boosting employment.

But Trump's victory didn't stop there, it lit a flame underneath the hopes and desperations of a small Greek based shipping company called DryShips Incorporated that's had creditors on it's heels for unpaid debt and stockholders wary of its aspirations when weighing up the bleak outlook of even the biggest operators within the sector.

$DRYS running from $4 to $100. Trump winning. All we need now is Armageddon to happen next week. pic.twitter.com/HKSHEn6EK6

— $NIPER TRADE$ (@vicerock4) November 15, 2016

A highly shorted stock, the surge in sudden optimism from Trump's victory based on the premise of an uptick in demand for trade in dry goods, products which DryShips Inc. moves for commodity producers, would shift the dynamics in favour of survival as opposed to bankruptcy as has been the case for some time.

Nonetheless the degree of short interest in the stock had been so severe that it caused the price to explode from less than $10 to over $100 in a matter of days and subsequently back down to $10 again. The occurrence of such an event is stirring up conversation amongst traders who are debating the tangibility behind the move and what it could be suggesting about the shipping industry.    

If there's one thing that does stick out it's the fact that the shipping industry has been sold off heavily over the past few years and the sudden change in tone has entered the possibility of a bottoming out phase in the minds of traders. In saying that it's highly doubtful that the negative press the shipping industry is receiving at the moment will simply go away in a hurry.

It's by this thought that gives rise to the awareness of bit-size optimisms that begin to trickle through as to the state of the shipping industry and whether they hold enough substance to support the industry into the future. It's too early to say the definite direction but there's reasonable foundation to believe there's something happening in the sector.