The Baltic Exchange’s main sea freight index rose to its highest in more than five and a half years on Thursday, driven by higher rates due to a shortage of capesize and panamax vessels amid rising demand in the Atlantic region.
The Baltic index, which tracks rates for ships ferrying dry bulk commodities, rose 2.2%, or 39 points, to 1,816, its highest since January 2014. The index has tripled since February.
The index rose 28% last week to post its best week in nearly five years, mainly driven by strong demand for vessels that ship iron ore from Brazil.
The capesize index rose 55 points, or 1.6%, to 3,416 points,its highest since August 2018.
Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, rose $302 to $26,705.
Iron ore prices have more than doubled this year as port stocks across China shrank to their lowest since early 2017 due to reduced shipments from top exporters Australia and Brazil, as well as robust demand.
Reflecting tightness, rates for transatlantic rounds are up 20% to $30,000 per day, while important long-duration China-Brazil-China route is up also 20% at $24,000 per day, ship broker Fearnleys said in a report.
A restart of Vale SA’s Brucutu mine in Brazil, which was shut in early February after a tailings dam burst killing more than 240 people, has prompted increased demand from the country.
With the world’s largest dry cargo ships coming out of service for refits to comply with tougher rules on emissions, charter rates are expected to remain strong, a top Cargill executive said.
The panamax index rose 90 points, or 5%, to 1,881 points, its highest since December 2013.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, increased $718 to $15,018.
Due to the lack of spot tonnage, charterers are forced to pay more than the previous fixtures, Fearnleys said.
The supramax index edged 15 points higher to 860 points, its highest since January.News Source: REUTERS