Baltic Dry Index sees biggest weekly jump
The Baltic Dry Index, a measure of shipping costs for commodities, had its biggest weekly jump in 11 weeks on surging rates for capesize-class vessels to haul coal and iron ore.
Seaworthy: In the Caribbean, the cost to transport crude oil to the US Gulf Coast on Aframax tankers fell 18% last week as demand to charter ships declined
The index tracking transport costs on international trade routes gained 8 per cent, the most since the week ended July 17. The gauge rose 73 points last Friday, or 3.2 per cent, to 2,357 points, according to the Baltic Exchange. Capesize rents have leaped 39 per cent in seven straight gains to US$30,808 a day.
'Suddenly a number of cargoes came out,' Castalia Fund Management (UK) fund manager Philippe van den Abeele said. 'It's a short-term phenomenon.'
China has relatively high commodity stocks and no reason for a 'mad rush' to import iron ore, he said. Some 40 to 50 capesizes may join the fleet by year-end, Mr Van den Abeele estimated.
China is the biggest consumer of iron ore, a steelmaking raw material and the largest single dry-bulk commodity hauled at sea. Freight rates rose to a record in 2008 before collapsing by year-end, making ships on order surplus to requirements.
Dry-bulk fleet capacity will grow 12 per cent this year, according to estimates from Drewry Shipping Consultants Ltd in London. The forecast doesn't include scrapping, delays and cancellations.
Rates to hire capesize ships will average US$31,000 a day during the fourth quarter, according to forward freight agreement (FFA) data from Imarex ASA at 4.32pm in Oslo. The FFAs, used to bet on or hedge against future dry-bulk freight rates, jumped 24 per cent this week.
Daily rents for smaller panamaxes rose 2 per cent to US$18,949. They will average US$18,375 in the last three months of 2009, the FFA data showed.
Separately, the cost of delivering Middle East crude to Asia, the world's busiest route for supertankers, halted five days of declines as owners awaited the remainder of this month's cargoes.
Over in the Caribbean, the cost to transport crude oil to the US Gulf Coast on Aframax tankers fell 18 per cent last week as demand to charter ships declined.
Rates to ship Saudi Arabian crude oil to Japan, the benchmark route for crude oil shipments, gained 0.4 per cent to 38.50 Worldscale points, according to the London-based Baltic Exchange. Rental income from the voyage fell 5.9 per cent to US$13,596 a day, according to the bourse, which takes fuel costs into account when calculating owners' returns.
Oil companies still need to hire about half the vessels they need to load this month from Persian Gulf, Halvor Ellefsen, a tanker broker at SeaLeague AS in Oslo said last Friday. Tanker rentals are normally called fixtures.
'We are still very short of the normal number of fixtures for this time of the month', meaning there should be more next week, London-based EA Gibson Shipbrokers said in a report last Friday. With a 'very small' supply of spare oil-company ships, 'it does give some hope for the owners'.
Owners may be further encouraged by signs the Organization of Petroleum Exporting Countries is losing discipline in constraining production. Rex Tillerson, chief executive officer of Exxon Mobil Corp, the world's biggest publicly traded oil company, said on Friday that Opec members have slipped from self-imposed production limits as oil prices rise.
Opec producers cut their combined output by 4.1 per cent to 28.4 million barrels a day so far this year, according to Bloomberg estimates. The fleet of in-service crude oil tankers has climbed 5.3 per cent to 2,106 vessels over the same period, Lloyd's Register-Fairplay data on Bloomberg show.
In the Caribbean, Aframaxes were hired for an average of Worldscale 70 from WS 85 on Sept 25, according to New York-based Poten & Partners and Houston's Lone Star, RS Platou. WS 70 is about US$3,000 a day after expenses, such as fuel and port fees, Poten said.
Rates gained 3.7 per cent in the last month.
A 'silent period of inquiry' persisted for the week, shipbroker Galbraith's said in a market report on Friday. 'This market pays about Worldscale 70, returning to the levels where it seems around bottomed, for now.'
US oil stockpiles are 10 per cent higher than the five-year average for the period, according to the US Energy Department.
Seaworthy: In the Caribbean, the cost to transport crude oil to the US Gulf Coast on Aframax tankers fell 18% last week as demand to charter ships declined
The index tracking transport costs on international trade routes gained 8 per cent, the most since the week ended July 17. The gauge rose 73 points last Friday, or 3.2 per cent, to 2,357 points, according to the Baltic Exchange. Capesize rents have leaped 39 per cent in seven straight gains to US$30,808 a day.
'Suddenly a number of cargoes came out,' Castalia Fund Management (UK) fund manager Philippe van den Abeele said. 'It's a short-term phenomenon.'
China has relatively high commodity stocks and no reason for a 'mad rush' to import iron ore, he said. Some 40 to 50 capesizes may join the fleet by year-end, Mr Van den Abeele estimated.
China is the biggest consumer of iron ore, a steelmaking raw material and the largest single dry-bulk commodity hauled at sea. Freight rates rose to a record in 2008 before collapsing by year-end, making ships on order surplus to requirements.
Dry-bulk fleet capacity will grow 12 per cent this year, according to estimates from Drewry Shipping Consultants Ltd in London. The forecast doesn't include scrapping, delays and cancellations.
Rates to hire capesize ships will average US$31,000 a day during the fourth quarter, according to forward freight agreement (FFA) data from Imarex ASA at 4.32pm in Oslo. The FFAs, used to bet on or hedge against future dry-bulk freight rates, jumped 24 per cent this week.
Daily rents for smaller panamaxes rose 2 per cent to US$18,949. They will average US$18,375 in the last three months of 2009, the FFA data showed.
Separately, the cost of delivering Middle East crude to Asia, the world's busiest route for supertankers, halted five days of declines as owners awaited the remainder of this month's cargoes.
Over in the Caribbean, the cost to transport crude oil to the US Gulf Coast on Aframax tankers fell 18 per cent last week as demand to charter ships declined.
Rates to ship Saudi Arabian crude oil to Japan, the benchmark route for crude oil shipments, gained 0.4 per cent to 38.50 Worldscale points, according to the London-based Baltic Exchange. Rental income from the voyage fell 5.9 per cent to US$13,596 a day, according to the bourse, which takes fuel costs into account when calculating owners' returns.
Oil companies still need to hire about half the vessels they need to load this month from Persian Gulf, Halvor Ellefsen, a tanker broker at SeaLeague AS in Oslo said last Friday. Tanker rentals are normally called fixtures.
'We are still very short of the normal number of fixtures for this time of the month', meaning there should be more next week, London-based EA Gibson Shipbrokers said in a report last Friday. With a 'very small' supply of spare oil-company ships, 'it does give some hope for the owners'.
Owners may be further encouraged by signs the Organization of Petroleum Exporting Countries is losing discipline in constraining production. Rex Tillerson, chief executive officer of Exxon Mobil Corp, the world's biggest publicly traded oil company, said on Friday that Opec members have slipped from self-imposed production limits as oil prices rise.
Opec producers cut their combined output by 4.1 per cent to 28.4 million barrels a day so far this year, according to Bloomberg estimates. The fleet of in-service crude oil tankers has climbed 5.3 per cent to 2,106 vessels over the same period, Lloyd's Register-Fairplay data on Bloomberg show.
In the Caribbean, Aframaxes were hired for an average of Worldscale 70 from WS 85 on Sept 25, according to New York-based Poten & Partners and Houston's Lone Star, RS Platou. WS 70 is about US$3,000 a day after expenses, such as fuel and port fees, Poten said.
Rates gained 3.7 per cent in the last month.
A 'silent period of inquiry' persisted for the week, shipbroker Galbraith's said in a market report on Friday. 'This market pays about Worldscale 70, returning to the levels where it seems around bottomed, for now.'
US oil stockpiles are 10 per cent higher than the five-year average for the period, according to the US Energy Department.