The Baltic Dry Index, a measure of shipping costs for commodities, fell for a fifth consecutive week as easing port congestion and fleet expansion pressured rates to hire capesize-class ships.
The Baltic Dry Index, a measure of shipping costs for commodities, fell for a fifth consecutive week as easing port congestion and fleet expansion pressured rates to hire capesize-class ships. The index tracking transport costs on international trade dropped 0.2 per cent this week to 2,415 points, for a 28 per cent decline in five weeks. Rates to hire capesize-class vessels slid 8.5 per cent this week to US$34,647 a day. The vessels typically haul coal and iron ore.
'Capes are being affected by increased fleet supply,' Derek Langston, a director at Simpson Spence & Young Ltd in London, said on Friday. The number of ships waiting at Chinese ports has dropped to 30 from a June peak of 88, while newly built or converted vessels are being delivered, he said.
China is the world's biggest user of iron ore, the largest dry-bulk commodity hauled at sea. Domestic prices for hot-rolled sheet dropped 15 per cent in the past four weeks. Iron ore stocks held by the country are 0.2 per cent short of levels reached a year ago when inventories rose to a record.
The fleet of capesize ships with carrying capacity of 110,000 to 200,000 deadweight-tons capacity will grow 20 per cent this year, according to estimates from Drewry Shipping Consultants in London. The figures don't include scrapping, delays or cancellations.
Smaller panamax-class ships that compete with capesizes for cargoes rose 15 per cent this week to US$19,921 a day. The vessels are being hired to haul minerals on the Atlantic Ocean and grains from the US Gulf, Mr Langston said.
Corn and soyabeans are poised for weekly declines on forecasts that rain last month will allow farmers in the US Midwest to produce more of the crops than the government forecast.