Baltic Dry Index rises 1%, ends 22-day slide
The Baltic Dry Index, a measure of shipping costs for commodities, rose for the first time in 22 days as rates increased for capesize and panamax vessels that haul coal, iron ore and grains.
The index, a measure of world trade routes, jumped 15 points, or one per cent, to 1,478 points, according to the Baltic Exchange last Thursday. It ends the longest slide since November. Capesizes, the gauge's biggest vessels, climbed 2.8 per cent to US$17,986 a day and panamaxes gained 2.6 per cent to US$9,167 a day.
In Tokyo, Japanese shipping shares jumped on news of the rise in the index.
Kawasaki Kisen Kaisha Ltd, the nation's No. 3 shipping line, advanced 5.8 per cent to 399 yen (S$6), while Mitsui OSK Lines Ltd, Japan's second-largest shipping line, climbed 5 per cent to 571 yen. Isuzu Motors Ltd, Japan's largest truckmaker, soared 10 per cent after Morgan Stanley said that demand in emerging markets will help an earnings recovery.
Morgan Stanley boosted its rating on Isuzu to 'overweight' from 'equalweight', saying that demand for trucks in China, Indonesia and other emerging markets has been stronger than the brokerage expected.
'It's highly possible the US and Chinese economies will have V-shaped recoveries,' said Toyota Asset's Hamasaki. 'As individual countries are closely woven into the global economy, recovery won't stay in one place but will spread.'
China Association of Automobile Manufacturers last Wednesday said that the nation's passenger car sales climbed by a 10th from a year earlier to a record last month.
Rates collapsed a record 92 per cent last year to below operating costs, forcing some owners to idle ships as the global economy and demand for exports slumped. The Reuters/ Jefferies CRB Index of 19 commodities has dropped 44 per cent in the past 12 months. Exports from China, Asia's second-largest economy, posted annual declines in the five months to February.
Freight rates are 'going to continue to struggle with Asian export growth running at a rate of about minus 15 per cent year-on-year,' Michael Lewis, head of commodities research at Deutsche Bank AG in London, told Bloomberg Radio last Wednesday. 'Any rallies in this market until really very much the end of this year are based on very shaky foundations.'
Hanjin Shipping Co, South Korea's largest shipping line, said last Thursday that it expects to post a first-quarter operating loss on freight rates and cargo volumes. It runs container ships, bulk carriers and liquefied natural gas tankers, according to its website.
Capesize forward freight agreements for the third quarter, used to bet on future shipping rates, closed at US$19,375 last Wednesday, a 7.8 per cent gain this month. Panamax FFAs for the same period were at US$11,750, a 4.3 per cent advance for this month. The data are from broker Imarex NOS ASA.
The index, a measure of world trade routes, jumped 15 points, or one per cent, to 1,478 points, according to the Baltic Exchange last Thursday. It ends the longest slide since November. Capesizes, the gauge's biggest vessels, climbed 2.8 per cent to US$17,986 a day and panamaxes gained 2.6 per cent to US$9,167 a day.
In Tokyo, Japanese shipping shares jumped on news of the rise in the index.
Kawasaki Kisen Kaisha Ltd, the nation's No. 3 shipping line, advanced 5.8 per cent to 399 yen (S$6), while Mitsui OSK Lines Ltd, Japan's second-largest shipping line, climbed 5 per cent to 571 yen. Isuzu Motors Ltd, Japan's largest truckmaker, soared 10 per cent after Morgan Stanley said that demand in emerging markets will help an earnings recovery.
Morgan Stanley boosted its rating on Isuzu to 'overweight' from 'equalweight', saying that demand for trucks in China, Indonesia and other emerging markets has been stronger than the brokerage expected.
'It's highly possible the US and Chinese economies will have V-shaped recoveries,' said Toyota Asset's Hamasaki. 'As individual countries are closely woven into the global economy, recovery won't stay in one place but will spread.'
China Association of Automobile Manufacturers last Wednesday said that the nation's passenger car sales climbed by a 10th from a year earlier to a record last month.
Rates collapsed a record 92 per cent last year to below operating costs, forcing some owners to idle ships as the global economy and demand for exports slumped. The Reuters/ Jefferies CRB Index of 19 commodities has dropped 44 per cent in the past 12 months. Exports from China, Asia's second-largest economy, posted annual declines in the five months to February.
Freight rates are 'going to continue to struggle with Asian export growth running at a rate of about minus 15 per cent year-on-year,' Michael Lewis, head of commodities research at Deutsche Bank AG in London, told Bloomberg Radio last Wednesday. 'Any rallies in this market until really very much the end of this year are based on very shaky foundations.'
Hanjin Shipping Co, South Korea's largest shipping line, said last Thursday that it expects to post a first-quarter operating loss on freight rates and cargo volumes. It runs container ships, bulk carriers and liquefied natural gas tankers, according to its website.
Capesize forward freight agreements for the third quarter, used to bet on future shipping rates, closed at US$19,375 last Wednesday, a 7.8 per cent gain this month. Panamax FFAs for the same period were at US$11,750, a 4.3 per cent advance for this month. The data are from broker Imarex NOS ASA.