OVERALL BALTIC DRY INDEX RISING TO ITS ONE-YEAR HIGH LEVEL
baltic dry index

OVERALL BALTIC DRY INDEX RISING TO ITS ONE-YEAR HIGH LEVEL

Kotak Commodity Services Ltd

*OVERALL BALTIC DRY INDEX RISING TO ITS ONE-YEAR HIGH LEVEL

*Average daily earnings for capesizes were up at $34,293


Firm trading activity surged on higher iron-ore demand has pushed the Capesize ships carrying dry bulk commodities, up over the $30000 level, reaching near new highs for the year. The overall Baltic dry index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was up at 2072 points, rising to its highest level since Sept. 25, 2019, as demand for larger capesize and panamax vessels grinds higher.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore, grain and coal, were up $1,227 at $34,293. The capesize index gained 148 points, or 3.7%, to 4,135 points, scaling to its highest since July 3. Since China needs high-quality iron ore, which is imported from overseas like Brazil, Australia, we expect the strong ore demand to support the freight rates for capesizes going forward.

The panamax index was up 10 points, or 0.7%, at 1,383 points. but recorded its first weekly drop in three. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, increased $80 to $12,355. The panamax index was down 10 points, or 0.7%, at 1,364 points. Among smaller vessels, the supramax index fell 3 points to 988 points, while the handysize index fell 1 point to 592 points.

the US Gulf for supramax size, which were achieving around $26,000 for runs to the Far East. Iron ore futures in China closed higher, helped by growing expectations for further policy measures to support a global economy hammered by the coronavirus pandemic.

Many businesses in China have reopened after weeks of coronavirus-led shutdowns, leading to an elevated shipping demand to the top steel producer country. With the momentum and excitement in the market seen closing out the week there looks to be more to come. The Pacific basin, with China and Korea on public holidays, has been difficult to read with rates in flux. Trading volumes in Asia were largely curtailed by mid-Autumn festival holidays in parts of the Far East and rates here eased as the week went on.

(Disclaimer: This analysis is only for educational purpose and is not and must not be construed as investment advice. It is analysis based purely on economic theory and empirical evidence. Readers are requested to kindly consider their own view first, before taking any position.) Date: 10-9-2020

Tri Une Impex Consultant

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