Driven By Iron Core, Congestion And Lack Of Ships BDI Soars To 3164

The Baltic Dry Index has closed at 3164!!!!!!!!!

oO

On Bloomberg news: Baltic Dry Index Exceeds 3,000 for First Time Since October

• May 27 (Bloomberg) -- The Baltic Dry Index, a measure of shipping costs for commodities, surpassed 3,000 points for the first time since October, buoyed by Chinese demand for iron ore.
  
  The index tracking transport costs on international trade routes rose 222 points, or 7.6 percent, to 3,164 points, according to the Baltic Exchange today. The measure posted an 18th straight gain, its longest advance in two years.
  
  Such is demand that shippers “are almost pleading” to hire vessels, Stuart Rae, co-managing director of M2M Management Ltd., a hedge fund group that trades freight derivatives and operates carriers, said by phone today. The rally “is being driven by iron ore, by congestion in China, and by a lack” of ships available for hire in the Atlantic.
  
  China’s 4 trillion-yuan ($586 billion) package to stimulate its economy “gives hope for a V-shaped” economic recovery there, Sam Walsh, chief executive officer of Rio Tinto Group, the world’s third-largest mining group, said yesterday. Chinese buying is setting a floor for bulk commodities prices, Goldman Sachs JBWere Pty analysts said.
  
  Rental rates for capesize vessels advanced 12 percent to $56,698 a day, according to the Baltic Exchange. Daily rentals for smaller panamax ships added 10 percent to $20,934. A capesize normally hauls about 175,000 metric tons, while a panamax is half the size.
  
  “It feels very strong out there,” Michael Gaylard, strategic director at broker Freight Investor Services Ltd., said by phone today from London. The supply of capesizes is “really tight in places, so it’s driving some routes higher.”
  
  Iron Ore
  
  The Baltic Dry Index advanced fourfold since the start of the year, recovering some of last year’s record 92 percent collapse. China’s iron ore imports ran at a record pace in February, March and April, according to customs data.
  
  The line of capesize vessels at Chinese ports has climbed to 70 from 33 two months ago, according to data from Simpson, Spence & Young Ltd., the world’s second-largest shipbroker. The carriers are waiting nine days to unload, compared with five on March 25.
  
  Contracts indicating future freight costs surged. July-to- September forward freight agreements, bets on the exchange’s future price assessments, rose 21 percent to $47,000 a day for rentals on capesizes. Panamaxes gained 16 percent to $21,250.