Baltic Dry Index jumps 36% in two weeks as China lifts more iron ore

The Baltic Dry Index, a measure of commodity shipping costs, had its biggest two-week gain in 14 months as Chinese iron ore buying extended a surge in charter rates for vessels that carry the steelmaking raw material.

The gauge jumped 4.2 per cent today to 2,756 points, according to the London-based Baltic Exchange. It’s climbed 36 per cent in the past two weeks, the largest fortnightly advance since June 2009. Charter rates for iron-ore carrying capesizes had the largest increase today, rising 8.9 per cent to $34,913 a day. Chinese steelmakers “are replenishing the stocks they destocked,” Amrita Sen, an analyst Barclays Capital in London, said by phone today. While inventories of iron ore at Chinese ports stand at a near-record 76.8 million metric tons, mills themselves “destocked massively” during the past several months, she said.

The Baltic Dry Index has now climbed 40 per cent in August while capesize charter rates have more than doubled, according to the exchange. The rising demand is enabling owners to overcome the effects of a fleet that’s expanding at about twice the speed of seaborne trade in commodities.

As well as more iron ore deliveries, there are also extra coal cargoes and “more grain shipments taking place all around,” Sen said. Rental rates for panamaxes that ship coal, iron ore and grains added 1.9 per cent to $24,830 a day; supramaxes climbed 2.1 per cent to $21,710; and handysizes strengthened 1.1 per cent to $15,682, exchange data show.