The Baltic Dry Index 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 percent this week to 2,415 points, for a 28 percent decline in five weeks.
It was little changed today. Rates to hire capesize-class vessels slid 8.5 percent this week to $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 by phone today. 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 percent in the past four weeks. Iron ore stocks held by the country are 0.2 percent 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 percent this year, according to estimates from Drewry Shipping Consultants Ltd. in London. The figures don't include scrapping, delays or cancellations.
Smaller panamax-class ships that compete with capesizes for cargoes rose 15 percent this week to $19,921 a day. The vessels are being hired to haul minerals on the Atlantic Ocean and grains from the U.S. Gulf, Langston said.
Corn and soybeans are poised for weekly declines on forecasts that rain last month will allow farmers in the U.S. Midwest to produce more of the crops than the government forecast. There are signs importers are stepping up purchases of cheap supplies of the crops from the U.S., the world's biggest grower, Don Roose, president of U.S. Commodities Inc. said yesterday.
Rates to hire capesizes will average $31,875 a day during the fourth quarter, according to forward freight agreement data from Imarex NOS ASA at 3:04 p.m. in Oslo. FFAs are used to bet on or hedge against future dry-bulk freight rates. Daily rents for panamaxes will average $19,500 in the last three months of 2009, the FFA data showed.