The cost of hauling iron ore and coal along China’s coast rose to a 16-month high, adding to signs the nation’s demand is strengthening for the two commodities that generate the most demand for dry-bulk shipping.
The China Coastal Bulk Freight Index, a measure of commodity transporting rates between the nation’s ports, advanced to 1,141.17 points on Sept. 13, a seventh weekly gain, according to data from the Shanghai Shipping Exchange. The measure has advanced 8.2 percent since the start of the year.
The increase is a sign of rising demand from China because coastal ships transport both domestic and imported cargoes to smaller Chinese ports from the nation’s bigger facilities, according to Pareto Securities AS, an Oslo-based investment bank. Imports of coal and iron ore are on course for a record this year, according to Clarkson Plc, the largest shipbroker. Rates for Capesize ships delivering both rose almost sixfold to $30,020 since the start of June, Baltic Exchange data show.
“It is a clear sign of high domestic demand,” Eirik Haavaldsen, a shipping analyst at Pareto, said by e-mail today. “This results in stockpiles being quickly emptied, and a continued need for further international imports, thus increasing demand for international vessels.”
Chinese stockpiles of rebar, the steel used to reinforce concrete, dropped to 6.25 million metric tons in the week ended Sept. 13, from 10.2 million tons in March, according to Shanghai Steelhome Information, a government-backed research company.