Chinese Ore Demand Leads to Further Freight Increases
February 11, 2009 · Print This Article
The Baltic Dry Index – a composite of 22 main freight routes – leapt over 10% on 9 February to 1,815 aided by rising Capesize rates. The jump came on Monday, a day that is traditionally subdued in activity terms as shipping companies concentrate on vessel position lists.
Tubarao-China hit $25/tonne on Monday, up over $5/t in under a week to its highest level since early October. The long-term average of Tubarao-China since the beginning of 2003 is $38/t, brokerage Simpson Spence & Young tells Steel Business Briefing. Brazil-Rotterdam shipments reached $11.50/t, a rise of almost $3/t since 4 February, while Australia-China was up around $2.80/t at $10/t.
Brokers attribute the gains to stronger Chinese iron ore demand, primarily out of Brazil, and increased congestion: around 50 Capesize vessels are waiting to berth off China. Chinese ore stocks at port have increased slightly over the last few weeks, to just over 60mt according to SSY, but this is unsurprising because of the higher activity.
Tonnage in the Atlantic basin also looks tight in the short-term – according to brokers. This means there are less open ships from charterers to choose from, which normally pushes up rates.
Shipments of iron from India to China, normally carried out on Supramax vessels with a deadweight of between 50-60,000 t, have also climbed as a result of stronger chartering interest. Charterers are paying around $14,000/day for the route, equivalent to around $11/t. This is substantially up from the October bottom of $2,000/day.
Source: Steel Business Briefing
http://www.steelbb.com
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