Rates to ship iron ore jumped the most in almost four months on speculation shipments from Brazil will boost demand as leading buyer China rebuilds stockpiles.
Daily earnings for Capesizes carrying 160,000 metric tons of raw materials gained 20 percent to $8,423, the highest since Dec. 11, according to the Baltic Exchange, the London-based publisher of freight rates. That’s the biggest climb since Sept. 18, helping the Baltic Dry Index, a broader gauge of commodities shipping costs, increase 5 percent to 820, figures showed today.
Six vessels were booked to China, including two from Brazil, according to Sam Margolin, an analyst at Dahlman Rose & Co. in New York. The South American country, the world’s second-biggest supplier, is expected to load more cargoes next month, squeezing the supply of available ships, said Alex Persenda, a director on the Capesize desk at Clarkson Plc, the world’s largest shipbroker.
“The beginning of February in Brazil started to be tight,” Persenda said by phone today. “When the freight market is at rock bottom, it doesn’t take much to bounce back.”
Rates are still below the $15,500 that Pareto Securities AS, an Oslo-based investment bank, says owners need to break even. Earnings averaged $7,680 a day last year, the lowest since at least 1999, exchange data show.
Ore with 62 percent iron content at the Chinese port of Tianjin was unchanged at $145.40 a dry ton today, according to The Steel Index Ltd. The benchmark price jumped as much as 37 percent since the start of December to a 14-month high on Jan. 8. February swaps gained 3 percent to $138 a ton as of 1:02 p.m. in London, according to GFI Group Inc. That’s heading for the biggest increase since Jan. 3, based on data from SGX AsiaClear, the largest clearer of the derivatives.
Imports will rise 3.6 percent to a record 770 million tons in 2013, Li Xinchuang, president of China’s Metallurgical Industry Planning & Research Institute, said at a conference sponsored by Bloomberg Industries in New York yesterday. The country’s daily crude-steel output rose 2.3 percent in the first 10 days of January to 1.944 million tons, the official Xinhua News Agency said today, citing the China Iron & Steel Association.
Stockpiles at Chinese ports rose 3.4 percent to 72.91 million tons this month, down 24 percent since the end of August, according to Beijing Antaike Information Development Co., a state-backed research company. That’s the lowest for the time of year since 2010, data show.
Daily rates for Panamaxes holding about half as much cargo as Capesizes fell 1.5 percent to $5,885 today, according to the Baltic Exchange. Supramaxes slid 0.4 percent to $7,686 and Handysizes, the smallest vessels tracked by the index, rose 1.3 percent to $6,905, according to the bourse.