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Thursday, 1 October 2009
Baltic index tipped to surge more than 80pc
The Baltic Dry Index, the main measure of shipping costs for commodities, may surge more than 80 per cent by the end of the year on increased demand for shipments to China, according to China Ocean Shipping (Group).
The Baltic Dry Index, the main measure of shipping costs for commodities, may surge more than 80 per cent by the end of the year on increased demand for shipments to China, according to China Ocean Shipping (Group).
The gauge might rebound to 4,000 points as local governments encouraged factory output, especially of steel, said Kong Fanhua, a senior researcher at the company.
“If you believe in a China story, believe in a recovery in the shipping market,” he said.
The index ended yesterday at 2,185 points.
Iron ore is the biggest dry-bulk cargo moved by sea, and China is the top consumer of the steelmaking material. The Baltic Dry Index, regarded by some investors as a proxy for shifts in global commodity demand, peaked this year at 4,291 in June as the mainland’s stimulus revived demand.
Talks on contract iron prices for next year between suppliers and Chinese mills might drive vessel bookings, Kong said. He said the fourth quarter was also the “traditional high season” for coal consumption, which should boost the shipping trade.
“China’s government can’t stop the current policy of expansion,” said Kong. “It’s just like driving a car on a mountain: if you stop in the middle of the mountain, you’ll slide down backwards.”
State-held China Ocean Shipping owns the world’s largest operator of dry-bulk ships.
Kong’s forecast suggests that the Baltic Dry Index may surge 82 per cent in the final three months of the year. The measure is a composite of the daily rates for four vessel sizes - capesize, panamax, handysize and supramax.
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Baltic index tipped to surge more than 80pc
Bloomberg in Singapore
30 September 2009
The Baltic Dry Index, the main measure of shipping costs for commodities, may surge more than 80 per cent by the end of the year on increased demand for shipments to China, according to China Ocean Shipping (Group).
The gauge might rebound to 4,000 points as local governments encouraged factory output, especially of steel, said Kong Fanhua, a senior researcher at the company.
“If you believe in a China story, believe in a recovery in the shipping market,” he said.
The index ended yesterday at 2,185 points.
Iron ore is the biggest dry-bulk cargo moved by sea, and China is the top consumer of the steelmaking material. The Baltic Dry Index, regarded by some investors as a proxy for shifts in global commodity demand, peaked this year at 4,291 in June as the mainland’s stimulus revived demand.
Talks on contract iron prices for next year between suppliers and Chinese mills might drive vessel bookings, Kong said. He said the fourth quarter was also the “traditional high season” for coal consumption, which should boost the shipping trade.
“China’s government can’t stop the current policy of expansion,” said Kong. “It’s just like driving a car on a mountain: if you stop in the middle of the mountain, you’ll slide down backwards.”
State-held China Ocean Shipping owns the world’s largest operator of dry-bulk ships.
Kong’s forecast suggests that the Baltic Dry Index may surge 82 per cent in the final three months of the year. The measure is a composite of the daily rates for four vessel sizes - capesize, panamax, handysize and supramax.
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