Returns for capesize ships that haul iron ore and coal advanced for a second session, as steel demand from Japan and congestion at ports in China and Brazil bolstered rates.
Daily rents increased 3.3 percent to $25,087, according to the Baltic Exchange, a London-based provider of freight costs on 29 dry-bulk routes. The Baltic Dry Index, a broader measure of commodity shipping costs, gained 0.9 percent to 1,811.
“There is congestion for iron-ore ships discharging into China and loading at ports in Brazil, and this is taking ships out of circulation,†said Philippe van den Abeele, the managing director of Castalia Fund Management (U.K.) Ltd., a London-based adviser to a hedge fund trading shipping derivatives.
Demand for steel from Japan was a “driving force in the dry bulk marketâ€Â, Erik Stavseth, an analyst with Oslo-based investment bank Arctic Securities ASA, wrote in an e-mailed report today. Iron ore is a raw material used in steel production.
Earnings are rebounding since they fell 20 percent in the three sessions after they reached $28,826 on Sept. 14, the highest level for 2011. Three vessels were hired to carry iron ore from Australia to China at rates of $10.30 to $10.60 a metric ton, compared with $10.25 to $10.30 a ton reported yesterday, Omar Nokta, an analyst with New York-based investment bank Dahlman Rose & Co., said in an e-mailed report.
Source- Bloomberg
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