Capesize strength propels Baltic index to 10-1/2-yr high
The Baltic Exchange’s main sea freight index that tracks rates for ships carrying dry bulk commodities extended gains, rising to its highest since late 2010 on Thursday as capesize rates jumped on strong Chinese iron ore demand.
The index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was up 40 points, or 1.5%, at 2,750 points, its highest since October 2010.
A variety of factors including robust demand for dry bulk commodities and forecasts for improved fleet utilisation rate over the next couple of years, “all paint a positive picture for dry bulk shipping players to finally capitalise on a long-awaited market turnaround”, Athens-based EastGate Shipbrokers said in a note.
The capesize index advanced 63 points, or 1.6%, to 4,077 points, a peak since early October 2020.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, jumped $518 to $33,808.
“Capesizes, being the primary vehicles that transport said commodity (iron ore), are directly benefiting from China’s almost insatiable demand for the red alloy,” EastGate Shipbrokers added.
Prices of rebar and hot-rolled coil in China, the world’s top steel producer, rose to record highs on Thursday, underpinned by strong demand at home and overseas.
The panamax index shed 4 points to 2,686 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, fell $30 to $24,176.
The supramax index rose 60 points to 2,037 points.
Source: Reuters (Reporting by Arpan Varghese in Bengaluru; Editing by Vinay Dwivedi)