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Baltic Dry Index posted its third consecutive week¡¯s drop


source:Transportweekly author: time:2009-03-20  

The Baltic Dry Index, a measure of shipping costs for commodities, posted its third consecutive week’s drop on March 13 on weakening demand for iron ore.

According to Exim News Service, the index fell by 79 points, or 3.6 per cent, to 2,122 points, according to the Baltic Exchange. That’s a 4.6 per cent decline for the week. Rates to hire Capesize vessels that typically haul coal and iron ore dropped by 17 per cent in a third straight weekly decline to $ 23,534 a day.

Ex-China, there are no signs of life, a London-based analyst at Thurlestone Shipping Ltd observed. Even there, they have high stocks of ore and falling steel prices, so their buying has slowed.Demand for steel from carmakers and builders has slumped as companies cut production to grapple with a slowing world economy. Iron ore stockpiles in China, the world’s biggest steelmaker, have risen by 1.2 per cent this year as domestic prices of hot-rolled sheet, a benchmark product, have fallen by 12 per cent.

Rates for Panamax ships, the biggest to fit through the locks on the Panama Canal, shed 3.2 per cent recently to $ 17,293 a day. That indicates demand to haul South American grains may have eased after pushing rents for the vessels 45 per cent higher the previous week.

Capesize forward freight agreements, derivatives used by traders to bet on future shipping rates, rose by 2.4 per cent to $ 19,000 a day for the second quarter in Oslo. Panamax futures advanced by 1.6 per cent to $ 13,250 for the same period.

However, rates for transporting crude oil from the Caribbean on Aframax tankers rose by 12 per cent as demand outweighed the number of ships available for voyages.

Aframaxes were hired for an average rate of Worldscale 140, according to New York-based Poten & Partners, London-based Galbraith’s and Houston-based Lone Star, RS Platou, a decline of 1.8 per cent from earlier.

Worldscale 140 is about $ 36,978 a day after expenses, such as fuel and port fees.

 

 



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