Fri Oct 5, 2012
Oct 5 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, gained for the sixth straight day on Friday on anticipation that China would build up inventories after returning from a week-long holiday.
The main index, which gauges the cost of shipping commodities including iron ore, coal and grain, rose 30 points or 3.6 percent to 875 on Friday.
The Baltic's capesize index rose 59 points to 1,932. Average daily earnings for the vessels, which usually transport 150,000 tonne cargoes such as iron ore and coal, rose 6.8 percent to $11,237.
Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
Bids for iron ore forward swaps remained firm on Friday, reflecting investor expectations spot iron prices would bounce back as Chinese steel mills replenished inventories when they returned next week.
However, thin volumes may have also helped exaggerate price gains.
"We question how far the dry bulk recovery will reach without a fundamental steel demand recovery," RS Platou Markets analyst Frode Morkedal said in a note.
"Furthermore, higher international iron ore prices are negative for the iron ore arbitrage, making domestic production in China more viable."
The Baltic's panamax index gained 54 points to 598, with average daily earnings for panamaxes, which typically transport 60,000 to 70,000 tonne cargoes of coal or grain, up 10 percent to $4,769.
Average daily earnings for handysize and supramax ships fell to $6,535 and $8,315, respectively.
The main index has risen 14.2 percent this week.
(Reporting By Shruti Chaturvedi in Bangalore; Editing by Pravin Char)
Oct 5 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, gained for the sixth straight day on Friday on anticipation that China would build up inventories after returning from a week-long holiday.
The main index, which gauges the cost of shipping commodities including iron ore, coal and grain, rose 30 points or 3.6 percent to 875 on Friday.
The Baltic's capesize index rose 59 points to 1,932. Average daily earnings for the vessels, which usually transport 150,000 tonne cargoes such as iron ore and coal, rose 6.8 percent to $11,237.
Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
Bids for iron ore forward swaps remained firm on Friday, reflecting investor expectations spot iron prices would bounce back as Chinese steel mills replenished inventories when they returned next week.
However, thin volumes may have also helped exaggerate price gains.
"We question how far the dry bulk recovery will reach without a fundamental steel demand recovery," RS Platou Markets analyst Frode Morkedal said in a note.
"Furthermore, higher international iron ore prices are negative for the iron ore arbitrage, making domestic production in China more viable."
The Baltic's panamax index gained 54 points to 598, with average daily earnings for panamaxes, which typically transport 60,000 to 70,000 tonne cargoes of coal or grain, up 10 percent to $4,769.
Average daily earnings for handysize and supramax ships fell to $6,535 and $8,315, respectively.
The main index has risen 14.2 percent this week.
(Reporting By Shruti Chaturvedi in Bangalore; Editing by Pravin Char)
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