Iron-Ore Ship Rates Seen Extending Gains as China Restocks

Rates to ship iron ore will extend gains as China starts replenishing stockpiles of the commodity used to make steel after prices fell, according to Arctic Securities ASA.

“We would expect volumes to remain firm and thus see freight rates for Capes continue to strengthen,” Erik Nikolai Stavseth, an Oslo-based analyst at the investment bank, said in an e-mailed report today, referring to Capesize vessels. “While the underlying market balance in dry bulk remains skewed toward oversupply -- effectively limiting how high rates can go -- our view is in a positive direction.”

Inventories at Chinese ports rose 6.5 percent since April 30 to 71.6 million metric tons, according to researcher Beijing Antaike Information Development Co. Imported ore at Tianjin fell 30 percent to $110.90 a dry ton from a 16-month high on Feb. 20, according to The Steel Index Ltd. Daily earnings for Capesizes surged 11 percent, the most since Jan. 17, to $6,976, figures from the London-based Baltic Exchange showed today.

Capesizes are the largest vessels in the Baltic Dry Index, a wider measure of rates to transport minerals and grains by sea. The gauge climbed 3.1 percent, the most since Jan. 17, to 873, exchange data showed.

Among the three types of smaller ships in the measure, daily average returns for Panamaxes, about half as big as Capesizes, increased 3.1 percent to $6,637, the highest since May 28, according to the exchange. Supramax ships gained for a 16th session to $9,363 and Handysizes, the smallest vessels tracked by the index, rose 0.5 percent to $7,791.

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