Iron Ore Drives Biggest Weekly Gain in Shipping Rates Since JuneAlaric Nightingale
Iron-ore shipping costs had the biggest weekly gain since June, amid signs demand is strengthening to transport the commodity to China.
Rates for Capesizes carrying at least 150,000 metric tons of the steelmaking commodity climbed 2.6 percent to $14,377 a day today, taking the rally this week to 35 percent, the most since June 28, according to the Baltic Exchange in London. The price is an average of earnings on four routes, and all climbed.
China’s imports of iron ore, the biggest source of demand for dry-bulk shipping, climbed to a record 73.14 million tons in July, according to customs data. The price of the commodity with 62 percent iron content has risen 28 percent to $141.20 a dry ton at the port Tianjin since the end of May, according to Steel Index data.
“It’s the iron ore that’s been more active, particularly out of Brazil and if you look at iron-ore prices, they have really jumped,” said Peter Norfolk, research director at Freight Investor Services Ltd. in London. “In the short term, it’s looking fairly positive.”
Freight swaps indicate prices will keep rising. The contracts for October-to-December traded at $19,125 a day, according to data from Clarkson Securities Ltd., a unit of the world’s largest shipbroker.
Brazil is the world’s second-largest iron-ore exporter, after Australia, according to data from the International Trade Centre, an agency of the United Nations and the World Trade Organization.