Commodity shipping costs rose to a record for a second day last Friday as congestion at China's ports exacerbated a shortage of vessels and the nation's steelmakers buy unprecedented volumes of iron ore.
The Baltic Dry Index, watched by banks including Merrill Lynch and UBS AG as an economic indicator, advanced 392 points, or 3.5 per cent, to 11,459 points, according to the Baltic Exchange in London. Crude oil and coal also climbed to records.
Chinese steel production has expanded more than fourfold in a decade, bolstering demand for coal and iron ore from Australia and Brazil. The country, the world's most populous, is also the biggest consumer of metals including copper and nickel.
China's iron ore imports are running at a 'phenomenal' level, Philip Rogers, an analyst at London-based shipbroker Galbraith's, said by phone last Friday. 'The pace of the increase caught everybody on the hop.'
The average capesize carrier, designed to transport about 180,000 tonnes of coal or iron ore, is sailing slower, indicating they may be spending more time at ports. The average speed last Friday was 9.69 knots compared with 9.95 knots last Monday, according to data compiled by Bloomberg.
China's steelmakers imported a record 42.9 million tonnes of iron ore in April, beating the previous all-time high set in February by 4.7 million tonnes, according to data from the China General Administration of Customs. Stockpiles of the raw material, at 62 million tonnes, are also at a record.
Steelmaking in China climbed at the fastest pace on record in March, according to the International Iron and Steel Institute.
'The psychological environment is very strong for the balance of the year,' Kjetil Sjuve, a director at Oslo-based shipbroker Lorentzen & Stemoco AS, said by phone. 'There is congestion building up in China' and Japan.
Simpson, Spence & Young and rival shipbroker Arrow Chartering said last Thursday that port delays in China are tying up vessels for longer.
The Bloomberg Dry Ships Index, which includes 12 shipping companies including Korea's STX Pan Ocean, has gained 78 per cent in a year, compared with a drop of 6 per cent for the Standard & Poor's 500 Index. The Baltic Dry Index has risen 72 per cent.
The Baltic Dry Index, watched by banks including Merrill Lynch and UBS AG as an economic indicator, advanced 392 points, or 3.5 per cent, to 11,459 points, according to the Baltic Exchange in London. Crude oil and coal also climbed to records.
Chinese steel production has expanded more than fourfold in a decade, bolstering demand for coal and iron ore from Australia and Brazil. The country, the world's most populous, is also the biggest consumer of metals including copper and nickel.
China's iron ore imports are running at a 'phenomenal' level, Philip Rogers, an analyst at London-based shipbroker Galbraith's, said by phone last Friday. 'The pace of the increase caught everybody on the hop.'
The average capesize carrier, designed to transport about 180,000 tonnes of coal or iron ore, is sailing slower, indicating they may be spending more time at ports. The average speed last Friday was 9.69 knots compared with 9.95 knots last Monday, according to data compiled by Bloomberg.
China's steelmakers imported a record 42.9 million tonnes of iron ore in April, beating the previous all-time high set in February by 4.7 million tonnes, according to data from the China General Administration of Customs. Stockpiles of the raw material, at 62 million tonnes, are also at a record.
Steelmaking in China climbed at the fastest pace on record in March, according to the International Iron and Steel Institute.
'The psychological environment is very strong for the balance of the year,' Kjetil Sjuve, a director at Oslo-based shipbroker Lorentzen & Stemoco AS, said by phone. 'There is congestion building up in China' and Japan.
Simpson, Spence & Young and rival shipbroker Arrow Chartering said last Thursday that port delays in China are tying up vessels for longer.
The Bloomberg Dry Ships Index, which includes 12 shipping companies including Korea's STX Pan Ocean, has gained 78 per cent in a year, compared with a drop of 6 per cent for the Standard & Poor's 500 Index. The Baltic Dry Index has risen 72 per cent.