The Baltic Exchange’s main sea freight index jumped 9.7% to its highest in more than 10 months on Thursday, driven by a surge in capesize and panamax rates, with rising iron ore prices fuelling the increase in rates for the larger vessels.
* The Baltic index, which tracks rates for ships ferrying dry bulk commodities, rose 151 points, or 9.7%, to 1,700 points, its highest since Aug. 23, 2018.
* The index, which reflects rates for capesize, panamax and supramax vessels, has risen for 15 straight sessions.
* The capesize index jumped 359 points, or 12.2%, to 3,298 points, extending gains for a 15th day and rising to its highest since Aug. 22 last year and best one-day percentage gain since April 30.
* Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, increased $2,871 to $26,085.
* Increased iron ore prices have been the main driver of the capesize rally, ship broker Fearnleys said in a report.
* “Activity from Brazil and Australia is therefore healthy, and rates are increasing healthy day by day.”
* Benchmark spot iron ore for delivery to China SH-CCN-IRNOR62 jumped to its highest since early 2014 on Wednesday.
* 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.
* 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.
* Shipments of iron ore account for about a third of sea-borne volumes of the larger capesizes.
* The panamax index rose 136 points, or 9.5%, to 1,569 points, its highest since late October.
* Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, increased $1,074 to $12,539.
* “Rates in both hemispheres have surged throughout the week. Many owners are trying their best to stay in the Atlantic, awaiting the rising fronthaul-rates,” Fearnleys said.
* The supramax index edged 11 points higher to 814 points, its highest since end March.