Capesize shipping rates may extend gains after rising to a record as the supply of larger vessels tightened on increasing demand for iron ore, coal and grains.
The hiring rate for a capesize vessel, which can transport 175,000 metric tons of dry-bulk cargo, rose 2.6 percent to $187,703 Monday, according to the London-based Baltic Exchange. The Baltic Dry Index, an overall measure of commodity-shipping costs on different routes and ship sizes, gained 1.2 percent to 10,995 yesterday. It rose to a record 11,033 on Oct. 29. Steel-product exports from China, the world's biggest producer of the metal, rose 64 percent to 53.8 million tons in the first 10 months from a year earlier, the Beijing-based customs said on its Web site. China, the world's largest consumer of iron ore, is in annual talks with mining companies this month on setting prices of the main steelmaking material. "We believe the fundamental outlook for dry-bulk shipping remains very strong, and see additional rate support over the coming four to six months," Henrik With, Oslo-based analyst at DnB NOR Markets, said in an e-mail. In Brazilian ports, there is limited opportunity to split cargoes for capesize
to panamax, creating more demand for the bigger vessels, according to DnB NOR's With. A panamax can transport 70,000 tons of cargo. Brazil is home to Cia. Vale do Rio Doce, the world's biggest iron ore producer.
Coal Demand Higher demand for power-station coal before the Northern Hemisphere winter has also helped more than double freight rates in the past year. China became a net coal importer in January this year, reducing the supplies from Indonesia, Australia and South Africa available for use by other countries and driving prices to a record.
The hiring rate for a panamax has risen in the past four days, increasing $1,692, or 1.9 percent, during the period to $92,083 as of Nov. 12, according to data on the Baltic Exchange. Cia. Vale do Rio Doce, BHP Billiton Ltd. and Rio Tinto Group may secure a 30 percent rise in benchmark ore prices next year, according to the median forecast of eight analysts surveyed by Bloomberg in September.
In the market for Freight Futures Agreements, or FFAs, the December capesize rate to move goods from Tubarao, Brazil to China rose 1.1 percent to $87.38 a ton, the eighth straight day of gains, according to the Baltic Exchange data. FFAs are used to speculate on or protect against swings in the cost of transporting goods.
|
