Rosier times ahead of shipping stocks
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry commodities, rose for a third straight session on Wednesday. A surge in Atlantic and Pacific activity boosted rates for larger vessels.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 25 points or 3.59 percent to 722 points.
Analysts observe that the market started to see some improvement and shipping inquiries for larger tonnage increased.
The Baltic’s capesize index climbed 7.16 percent to 1,421 points. Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, rose $890 to $5,896.
A steady flow of fresh inquiries suggest an increase in the demand and create some upward pressure in rates. Rates of capesize vessels gained mostly due to iron ore restocking in top consumer China backed by higher steel prices.
Analysts expect the positive momentum in capesize activity to continue for the next couple of days. Most probably it will extend into the next couple of months as the upcoming holiday season in Europe and North America will likely see increased consumer spending.
The Baltic Exchange’s main sea freight index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen about 58 percent this year.