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LONDON—The Baltic Dry Index, a measure of shipping costs
for commodities, advanced to a one-month high and may
rise further on speculation that demand for ships will
accelerate as coal-supply backlogs are cleared.
The
index, which tracks transport costs on international
trade routes, rose 26 points to 7,381 points, according
to the Baltic Exchange in London. Hire rates advanced
for every ship size except capesizes, the largest within
the benchmark.
Once
coal-production bottlenecks ease in Australia, South
Africa and Indonesia, hire rates “will for sure have
another bull run,” Kjetil Sjuve, a director at
Oslo-based shipbroker and consultant Lorentzen & Stemoco
AS, said by telephone Monday.
Flooding
in Queensland, Australia, has caused coal cargo
disruptions and boosted the price of the fuel at
Newcastle in New South Wales to records. Indonesian
production was also curbed by rain. Glencore
International AG declared force majeure, allowing it to
postpone shipments, on one coal cargo from South Africa
on February 15 because of problems at
Richards Bay
port, Reuters said.
Asia’s
three largest steel makers agreed to pay Cia. Vale do
Rio Doce 65-percent more for iron ore, setting a global
benchmark for prices that takes effect April 1. Rio
Tinto Group said it’s still pushing for higher prices as
Chinese steel makers can save money by buying Australian
supplies because of the freight saving compared with
Brazil.
“The
higher price is definitely not negative for markets,”
Sjuve said.
Forward-freight agreements (FFAs), contracts traders buy
and sell to bet on or hedge the cost of shipping,
declined for capsize vessels.
The
contracts for April to June dropped 1 percent to
$125,000 a day, according to prices from Imarex NOS ASA,
a broker of the contracts. April-to-June FFAs for
panamaxes, the second-biggest in the index, declined 2.2
percent to $64,500 a day. (Bloomberg) |
