Commodity-shipping rates, down 22 percent last month, may gain after flooding in Australia disrupted coal exports, potentially forcing buyers to look further afield for supplies, Arctic Securities ASA said.
Australia had its wettest September-to-November spring on record, according to the Bureau of Meteorology. Xstrata Plc, the world’s biggest power-station coal exporter, shut part of its rail system and will supply clients from stockpiles. Macarthur Coal Ltd., Aquila Resources Ltd. and Vale SA declared force majeure last week.
Port congestion may be unchanged or “slightly up” and ton-miles may rise, Erik Nikolai Stavseth, an analyst with Oslo- based Arctic, said by e-mail today. Ton-miles measure shipping demand by multiplying cargo volumes by distance traveled. China, the biggest coal user, has built up inventories since early September to meet winter heating needs.
“The signs are definitely in the bullish direction,” Stavseth said. “As stockpiles at Chinese power plants are rumored to be low, I doubt they are cancelling stems -- rather, scrambling to secure alternative supply,” he said, using an industry term for cargoes.
The Baltic Dry Index, a measure of costs to ship dry-bulk commodities, fell 0.3 percent today to 2,173 points, according to the Baltic Exchange in London. It has gained 3.5 percent this month, rebounding from November’s decline.
Vessels chartered to export coal to China, the world’s biggest energy user, increased about 36 percent last week, Commodore Research & Consultancy said.
Suppliers may have hired 19 vessels to deliver coal to China in the seven days ended Dec. 3, up from 14 in the prior week, Jeffrey Landsberg, president of New York-based Commodore Research, said in a note yesterday. Chinese thermal-coal demand “remains robust,” he said.
Australia is the second-largest exporter after Indonesia of coal burned for power and ranks first when coal to make steel is included, according to the World Coal Institute’s website. The group compiled the data from information provided by BP Plc, the International Energy Agency, the World Steel Association, Simpson Spence & Young and the World Energy Council.
Force majeure is a legal clause relieving companies from meeting contract terms because of circumstances beyond their control.