LONDON—The Baltic Dry index, a measure of shipping costs for commodities, had its first decline in three days Friday on reduced demand for iron ore in China, the world’s largest buyer of the material.

The index for transport costs on trade routes fell 46 points, or 0.5 percent, to 9,428 points, data from the Baltic Exchange in London show. It declined 20 percent over an eight-day slide through June 17 and is 2.6 percent down last week.

Chinese imports of iron ore are giving a distorted view of demand and must slow to avoid worsening port congestion and causing corporate losses, the China Iron and Steel Association said on June 18. The ore has been bought by speculators and to make steel amid a construction boom. Companies hold about 79.2 million metric tons of iron ore at ports, a record.

“China has built its stockpiles. They’ve grown and they can’t take much more,” Gavin Durrell, a Cape Town-based official at Island View Shipping, Africa’s largest commodities shipping line, said by phone. “They have to ease off a bit.”

Demand for ships has also been cut by a three-month Argentine farmers’ protest over higher export taxes introduced on March 11. The dispute has blocked roads, brought strikes and curbed exports. Parana River processors and export terminals got no deliveries this week. Argentina is the world’s biggest soybean oil exporter.

The farmers will halt their latest strike at midnight before the Argentine Congress starts a debate next week over export taxes, the Rural Society, the biggest farm group, said over the weekend.

Rental rates for typical iron-ore carriers, so-called capesize vessels capable of hauling 170,000-ton cargoes, declined 2.1 percent Friday, to $161,551 a day. Smaller panamaxes for 70,000-ton loads advanced 2 percent to $70,341 a day. Charterers can split cargoes between vessels to cut costs.

Forward-freight agreements, instruments used to bet on future costs to hire vessels, were mixed. Contracts for panamaxes for July to September rose 0.1 percent to $72,250 a day, prices from Oslo-based broker Imarex NOS ASA showed. Contracts for capesizes in the period retreated 1.4 percent to $158,250 a day. (Bloomberg)

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Baltic Dry index drops on falling Chinese demand for iron ore

LONDON—The Baltic Dry index, a measure of shipping costs for commodities, had its first decline in three days Friday on reduced demand for iron ore in China, the world’s largest buyer of the material.