Baltic Dry Index up for 3rd day in London
The Baltic Dry Index, a measure of shipping costs for commodities, rose for a third day in London on Friday as owners anticipated an increase in Chinese demand for iron ore.
The index, which tracks transport costs on international trade routes, advanced 82 points, or 1.4 per cent, to 6,134 points, according to the Baltic Exchange. Rental rates gained for capesize carriers and panamax ships, the biggest vessels in the benchmark.
'The Chinese will be back and they will be using more iron ore,' Gavin Durrell, a Cape Town-based official at Island View Shipping, Africa's biggest bulk-shipping line, said. 'Their stockpiles are winding down sufficiently and we've reached the bottom.' China's steel mills will accelerate purchases of iron ore because everything they ship after April 1 will cost more, he said.
UBS and Credit Suisse Group estimate that the raw material's 2008 price, which should come into effect after April 1, will be as much as 70 per cent above last year's tariff.