Bloomberg reported that the Baltic Dry Index, a measure of commodity shipping costs fell below 1,000 points for the first time since January 2009 on signs Chinese demand for iron ore cargoes is slowing, exacerbating a glut of vessels.

Data from the London-based Baltic Exchange show that the index slid for a 20th session to 974 points, extending this year slump to 44%. Charter rates fell for all four vessel types within the gauge. The largest decline was for Capesizes carrying the steelmaking raw material which fell 8.3%.

Mr Kasper Moller director of shipbroker Maersk Broker Asia said weakening demand for iron ore in China, the biggest consumer is resulting in fewer charters of the vessels. Clarkson Plc, the world largest shipbroker said capesizes represent about 40% of the global fleet of commodity carriers.

Mr Moller said “If the Chinese market just takes its foot off the accelerator for a second that has an immediate impact. We’re having a lot of new ships being delivered, too.”

Oslo based RS Platou Markets AS said China the biggest source of global shipping demand is slowing iron ore imports before Lunar New Year holidays that start on January 23. Weather related port disruption curbed shipments from Australia and Brazil while rains in Colombia and Indonesia have constrained coal exports.

(Sourced from Bloomberg)