Feb. 24 (Bloomberg) -- Earnings for Capesize ships that haul steel-making raw materials including iron ore and coal advanced for a third day, rising 10 percent from this year’s low, as Chinese cargo buying boosted vessel demand.
Daily returns for Capesize vessels rose to $5,699 today, according to the Baltic Exchange, a London-based provider of freight costs on 29 dry-bulk routes. Rents fell to this year’s low of $5,158 a day Feb. 21, the exchange data show. China is the top global steel producer.
Increased Capesize vessel bookings partly boosted rates that plunged 79 percent since the start of the year, according to Peter Norfolk, a London-based analyst at derivatives broker Freight Investor Services Ltd. Prices for iron ore imported into the Chinese city of Tianjin increased for a fifth session, gaining 0.2 percent to $139 a metric ton, according to figures from The Steel Index Ltd.
“There’s been a handful of fixtures out of Brazil and Australia which has likely pushed rates up,” Norfolk said by phone. “There’s clearly some Chinese buying at these low freight levels and that’s sufficient to move rates up slightly. Rates are still very low.”
Earnings increased for three of the four classes ships tracked by the Baltic Dry Index, a measure of commodity shipping costs. The gauge added 1.7 percent, rising to 718 points.
Daily hire costs for Panamaxes, the biggest ships that can navigate the Panama Canal, declined 1.4 percent to $6,705, according to the exchange. Supramaxes, which carry about 25 percent less than Panamaxes, rose 2.3 percent to $6,920. Handysizes, the smallest ships tracked by the index, gained 0.7 percent to $5,980.
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