September 08, 2008

Coal and iron ore shipping rate rise to record levels

It is reported that Coal and iron ore shipping rates may extend gains to records this week on rising demand to transport raw materials across the Pacific and the Atlantic amid a limited supply of vessels.

According to data on the London based Baltic Exchange the Baltic Dry Index, an overall measure of commodity shipping costs on different routes and ship sizes, advanced 3.9% to 8,956 on September 21st 2007 setting a record for a second day. This year, the measure has broken records for a total of 83 days.

London based shipbroker Galbraith's Ltd said in its report that “There seemed to be no stopping the market as it rocketed in both the eastern and western regions last week. The Baltic Dry Index is threatening to break through the 9,000 barrier.”

The rates have been boosted by rising demand for raw materials led by China coupled with congestion in some of the major ports including world's biggest coal export harbor Australia's Newcastle. The North American grain export season is helping boost charter rates, which are typically strongest in the fourth quarter.

(Sourced from MySteel.net)