Iron-ore shipping rates slid for a second day amid speculation producers of the raw material are seeking fewer vessels after rates more than doubled this month.
Day rates for Capesize vessels, which haul about 160,000 metric tons of the cargo as well as raw materials including coal, fell 6 percent to $16,769 a day, according to data from the Baltic Exchange in London. The Baltic Dry Index, a wider measure of commodity transportation costs, fell 3.4 percent.
Strengthening iron-ore demand from Chinese steel mills helped drive freight costs to the highest since January on Oct. 23. Miners may be temporarily curbing bookings following that rally, causing costs to fall, said Philippe Van Den Abeele, the London-based managing director of Castalia Fund Management (U.K.) Ltd., an adviser to a hedge fund trading freight derivatives.
“It is a pause for breath,” he said by phone today. “We are in a fairly strong market with strong restocking going on in China until the end of the year.”
Iron-ore prices at the Chinese port of Tianjin rose 1.1 percent to $120 a dry metric ton, according to data from the Steel Index. They gained 38 percent since Sept. 5.
The three other vessel categories tracked by the Baltic Exchange also declined. Rates for Panamaxes, which are about half the size of Capesizes, fell 1.7 percent to $6,480, the bourse’s data show. Supramaxes declined 0.8 percent to $7,386. Handysizes slid 0.8 percent to $6,430.