Shipping costs for raw materials and agricultural products advanced the most in 11 weeks as strengthening demand for vessels to load iron ore caused freight costs for the steelmaking raw material to surge.
The Baltic Dry Index climbed 9.3 percent, the most since Sept. 9, to 1,719, according to the Baltic Exchange, a London-based publisher of shipping costs on more than 50 trade routes. Daily rates for Capesize ships that mostly transport iron ore jumped 22 percent, leading gains, to $21,719. Charter rates rose for all four ship types tracked by the bourse.
“There’s plenty of demand versus the number of ships out there,” Steve Rodley, the joint managing director of GMI Resources U.K. LLP, a London-based trader with 52 vessels, said by telephone today. “First and foremost, it’s about classic supply and demand.”
While demand strengthened, some vessels may also be delayed in Asia, according to Rodley. GMI had to divert one of its ships to refuel in South Korea following an explosion last week at Qingdao, a Chinese port city, he said. The deviation added about two days to its voyage.
Supramax ships, most of which are fitted with cranes to load and unload cargoes, advanced 1.2 percent to $15,247 a day, their 52nd consecutive increase. Panamax vessels that are the biggest to navigate the Panama Canal rose 6.8 percent to $12,880, according to the Baltic Exchange. Handysizes, the smallest vessel class, added 1.8 percent to $10,747.