Iron Ore Transport Rates Seen Surging as Ships Scrapped: Freight
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The beaches of Bangladesh are filling with unwanted ships waiting to be scrapped, driving up prices for transporting iron ore and halting losses for STX Pan Ocean Co., South Korea’s biggest owner of the carriers.
The cost of shipping iron ore in Capesize vessels will increase almost sixfold to $14,900 a day in December from the 2012 low, according to prices of swaps used by traders to hedge freight costs that reveal the direction of the market accurately about 60 percent of the time. Prices are rising as the fleet shrank 0.6 percent last month, its first contraction since November 2008, according to data from IHS Inc., an Englewood, Colorado-based research company.