Ship Rates Rise Most Since October on Chinese Iron Ore BookingsAlaric Nightingale
Shipping rates rose the most since October, driven higher by an increase in bookings of vessels to take iron ore to China from Brazil and Australia.
The Baltic Dry Index climbed 5.3 percent to 1,060 points, the biggest gain since Oct. 23, according to the Baltic Exchange in London, a publisher of costs on more than 50 trade routes. Capesizes that transport iron ore, a steelmaking raw material, surged 17 percent to $12,909 a day.
Investors are becoming more bullish on the prospects for commodity-shipping markets. The price of new Capesizes built in China rose 12 percent to $47 million in the first half of this year, according to data from Simpson, Spence & Young Ltd., a London-based shipbroker. Steel reinforcement bar futures are trading near the highest level in four months in China, according to the Shanghai Futures Exchange data.
“The activity has been centered mainly along the Australia-to-China and Brazil-to-China routes,” Omar Nokta, a senior analyst at Global Hunter Securities in New York, said by e-mail today. “Firmer steel prices in China have led to increased iron ore buying interest by Chinese steel mills.”
Three of the four shipping rates tracked by the Baltic Exchange advanced. Rates for Handysizes, the smallest within the Baltic Dry Index, rose 0.1 percent to $7,555 a day. Supramaxes, the next size up, gained by the same amount to $9,514. Panamaxes, the largest to navigate the Panama Canal, fell 0.5 percent to $7,388 a day.