World News
Chinese Demand, Mideast Tensions Drive Up Bulker Rates
Shipping rates for capesize vessels hit nearly $30,000 per day in recent days, their highest level since December 2011, driven by Chinese demand for iron ore and political tensions in the Middle East, Reuters reports.
Since 2008, Capesize rates have ranged from a peak of $233,988 per day to a low of just over $2,000 a day, barely a fifth of the vessels' operating costs.
"While the capesize market has benefited greatly from strong demand for imported iron ore cargoes from Chinese buyers, panamax, supramax, and handysize rates have been aided by a moderate amount of coal, grain, and mineral cargoes surfacing in the market recently," said Jeffrey Landsberg of commodities consultancy Commodore Research.
Peter Sand, chief shipping analyst for the Baltic and International Maritime Council (BIMCO), said the industry group does not expect "a full-blown recovery" for dry bulk vessels, but it expects increased "windows of opportunity" for ship owners.
"The fundamental balance is improving almost by the day," he said.
"But we are coming from a very low point."
Political turmoil in the Middle East, including an attack on a container ship in the Suez Canal, has driven up bunker prices, driving up rates and encouraging hedging on freight derivatives contracts.
Moody's Investor Services said in June that dry bulk and crude oil carriers are facing the toughest market conditions among shipping segments.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 502.00 | 4.50 | 617.00 | 5.50 |
| Rotterdam | 457.50 | 2.50 | 623.50 | 6.50 |
| Houston | 469.00 | 3.50 | 623.00 | 2.00 |
| Fujairah | 494.50 | 6.50 | 715.50 | 5.50 |
| Global 20 Ports Average | 526.00 | 3.00 | 712.50 | 11.50 |
| Global 4 Ports Average | 481.00 | 4.00 | 645.00 | 4.50 |
| Global Average Bunker Price | 569.00 | 2.00 | 750.00 | 5.50 |
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