The Baltic Exchange’s main sea freight index jumped to its highest in more than a decade, powered by strong demand across vessels ferrying dry bulk commodities and shipping constraints in China.
The overall index, which factors in rates for capesize, panamax, supramax and handysize vessels, rose about 5% to its highest since mid-2010 at 3,833 points.
Peter Sand, chief shipping analyst with trade association BIMCO, said it’s not the volumes that have lifted freight rates alone.
“The sector has benefited to a good extent by the changes in trade lanes due to geopolitical disputes (China-Australia for instance), coal trades mainly,” said Sand.
“Support also stems from longer waiting times, in particular at the discharging ports and in particular in China.”
Chinese ports are facing congestion as vessels due to call at Ningbo are being diverted, in part due to stricter disinfection measures under China’s coronavirus policy.
The capesize index jumped 415 points, or 8.4%, to 5,365, a peak since May 5. Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, rose $3,446 to $44,495.
BIMCO’s Sand said the overall gains in freight rates for all sizes of bulk carriers showed demand for smaller vessel segments have been stronger than that of capesizes, considering iron ore imports into China have dipped so far this year.
Benchmark iron ore futures in China slumped to their lowest since March 24, as an increase in portside inventories and curbs on steel production weighed on prices.
The panamax index advanced 90 points, or 2.5%, to its highest since June 15 at 3,707.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, increased by $808 to $33,360.
The supramax index rose about 43 points to an all-time high of 3,189, according to Refinitiv Eikon data available since 2017.
Source: Reuters (Reporting by Rahul Paswan, additional reporting by Arpan Varghese in Bengaluru; Editing by Subhranshu Sahu)