Shipments of iron ore to China are poised to rise after inventories of the steelmaking raw material at local ports fell to the lowest since 2010, said Arctic Securities ASA.
Stockpiles came to 71.3 million metric tons as of Dec. 21, according to figures from researcher Antaike Information Development. That was the lowest level since Sept. 10, 2010. China is the world’s biggest importer of the ore.
“The decline in iron-ore port stocks should support an increase in Chinese iron-ore imports as restocking takes effect,” Oslo-based investment bank Arctic said today in an e-mailed report.
Ore with 62 percent iron content imported to the port of Tianjin traded at $144.90 a dry ton as of Dec. 31, up 25 percent for the month, according to a gauge from The Steel Index Ltd. Prices rose 7 percent since Dec. 21, Arctic said.
“Although we find the recent surge in iron-ore prices as temporary, we think it could have a positive effect on dry-bulk stocks near-term,” the bank said, citing expectations for “a spillover into the shipping markets.”
Still, charter rates for ore-carrying ships will only move higher in 2013’s second quarter, even as rising steel demand boosts ore prices, held back by “a last wave” of deliveries of new vessels, the report showed.
The Baltic Dry Index, a measure of costs to transport minerals and grains by sea, averaged the lowest since 1986 last year amid an oversupply of vessels and slowing global demand for commodities that supressed ship earnings. The gauge slipped 0.1 percent to 698 today, according to the London-based Baltic Exchange, an assessor of freight rates.
Daily average hire costs for Capesize vessels, the largest to haul iron ore and coal, declined 0.6 percent to $4,864, exchange data showed.
Iron-ore shipments in the current quarter will be lower than the prior period as rains limit output at mines in Brazil and Australia, the largest producers, Oslo-based investment bank Fearnley Securities AS said in an e-mail today. China imported almost two-thirds of the 1.1 billion tons of iron ore shipped by sea in 2012, according to Clarkson Plc, the biggest shipbroker.
Daily average charter rates for Panamaxes, the largest ships to navigate the Panama Canal, slid 2 percent to $5,426 and Supramaxes that are about 25 percent smaller gained 1.2 percent to $7,702, according to the exchange. Handysizes, the smallest vessels in the index, were little changed at $6,603.