Rates to ship iron ore reached a 19-week high on speculation China, the largest buyer of the commodity used to make steel, will rebuild stockpiles and ease import rules.
Daily earnings for Capesizes holding about 160,000 metric tons of cargo surged 9.3 percent to $7,627, the highest since Jan. 28, figures from the Baltic Exchange, the London-based publisher of shipping costs, showed today. The seventh gain in a row brought the weekly increase to 39 percent.
Chinese traders booked more cargoes from Australia, the largest supplier, after holidays earlier this week, according to Omar Nokta, a New York-based analyst at Global Hunter Securities LLC. More cargoes from Brazil are providing longer voyages, according to Clarkson Securities Ltd., a unit of the world’s biggest shipbroker. Rates will improve in the second half as China rebuilds inventories from a four-year low and scraps import licenses, Chief Executive Officer Alex Gray said.
“China has been destocking in recent months to a quite radical extent,” Gray said by phone today. “There is a point at which, with steel output being as strong as it’s been, something’s got to give. We’re quite positive about the outlook for Capesizes going forward.”
Stockpiles of iron ore at Chinese ports rose 8 percent to 71.6 million metric tons from a four-year low on March 8, according to Beijing Antaike Information Development Co. Imported cargoes at Tianjin, the benchmark price, dropped 22 percent in that span, according to The Steel Index Ltd. China’s steel production rose 4.1 percent to a record 91.2 million tons in May, according to the National Bureau of Statistics.
China eliminated a permit system for iron-ore imports to help small and medium-sized companies buy the raw material, said Wang Chunsheng, head of iron-ore trading at Beijing-based steelmaker Shougang Group and previously vice secretary-general of the state-run China Iron and Steel Association.
The Baltic Dry Index, which includes smaller commodity carriers, rose 3.1 percent to 900 on gains across all four ship classes it tracks. The gauge advanced 11 percent this week, the most since October.
Daily earnings for Panamaxes holding about half as much cargo as Capesizes added 3.1 percent to $6,845, according to the exchange. Supramaxes and Handysizes, the two smallest vessel types in the index, both increased less than 1 percent to $9,408 and $7,853 a day, respectively.
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