Iron ore output expanding 11 percent this quarter will help increase shipping rates, according to Fearnley Securities AS.
Volumes will rise to 49 million metric tons from 44 million tons, Rikard Vabo, an Oslo-based analyst at the investment- banking unit of Norway’s second-largest shipbroker, said in an e-mail today, citing guidance from BHP Billiton Ltd. (BHP), the world’s largest mining company. Rates for Capesizes hauling 160,000 tons of the commodity used to make steel averaged $6,058 a day last quarter, the second-lowest since at least 1999, according to the Baltic Exchange in London.
“With stronger output from the major miners in the second quarter, the Capesize market should on the margin see better demand than experienced during” the prior three months, Vabo said in the report.
BHP, Rio Tinto Group and Vale SA (VALE5), the three biggest iron ore exporters, are planning $250 billion of new mines, according to data compiled by Bloomberg. BHP produced 40.2 million tons in the three months to March 31, compared with 37.9 million tons a year earlier, the Melbourne-based company said today in a statement today.
To contact the editor responsible for this story: Alaric Nightingale at email@example.com