Signs of a recovery in demand for cargo vessels are visible as demand for the ships is going to rise on account of the approaching winter season.
Coal is expected to be stockpiled ahead of the winter season that is going to gradually strengthen demand for cargo vessels, freight rates are thus expected to go up from the current levels. Imports of coal is expected to rise substantially in China as that government has implemented a policy to reduce domestic coal production. In the coming days, import of coal is expected to rise substantially in China to meet the growing demand during the winter season.
Current freight rates (coal cargoes)
| Route | Supramax | Panamax |
| Australia to India | 13 | 11 |
| South Africa to India | 11 | 9 |
| Indonesia to India | 7 | 6 |
Freights in USD/MT
Source: SteelMint Research
Current freight rates (iron ore cargoes)
| Route | Supramax |
| Australia to India | 8.5 |
Freights in USD/MT
Source: SteelMint Research
The Baltic Dry Index has shown an improvement due to the gradual strengthening of demand for cargo vessels. On 26 Aug’16, the index was recorded higher at 720 points. The index is an indicator of the global movement in freight rates in respect to all types of cargo vessels, transporting all kinds of commodities, including coal and iron ore.
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