The Baltic Dry Index, a measure of commodity shipping costs, fell for the longest period in almost nine years as declining Chinese steel prices erode the nation's iron ore demand.
The index of freight rates on international trade routes fell 38 points, or 2 per cent, to 1,902 points on Friday, according to the London-based Baltic Exchange. The drop was the 31st straight decline. That's the longest since the 34 sessions to Aug 15, 2001, according to Baltic Exchange prices. Charter rates for all types of ships tracked by the exchange fell.
'We don't see anything in the next two to three weeks that's going to turn the market around,' Guy Campbell, head of dry bulk at Clarkson plc, the world's largest shipbroker, said by phone. 'Everything is centred on China. We are still watching China in terms of where the steel price is going.'
The price of hot-rolled steel in China has declined 17 per cent to 3,909 yuan (S$797) a metric tonne since rising to a 2010 high of 4,698 yuan on April 15, according to prices from Antaike Information Development.
Some of the nation's mills are shuttering blast furnaces for maintenance and others are relying on existing stockpiles instead of imports, Michael Gaylard, strategic director at Freight Investor Services Ltd, said by phone from Shanghai.
Iron ore creates the single-biggest source of demand for dry-bulk shipping, according to data from Clarkson's research unit. Trade in the steelmaking ingredient will total 996 million tonnes this year. Coal is second-largest at 865 million tonnes of seaborne trade. Grains are 315 million tonnes.
'It's a very difficult picture as far as miners are concerned trying to put together sales' of the raw material, Mr Gaylard said. The present slump in shipping costs 'is going to continue for July at least', he added.
Charter rates may start to recover starting in September once Chinese mills have worked through iron ore stockpiles and need to accelerate purchases again, Clarkson's Mr Campbell noted.
Rental rates fell 2 per cent to US$15,679 a day for panamax vessels, the largest to navigate the Panama Canal, according to the exchange. They declined 3 per cent, to US$17,643, for capesizes, so called because they have to travel around South Africa's Cape of Good Hope or South America's Cape Horn to deliver consignments.
The index of freight rates on international trade routes fell 38 points, or 2 per cent, to 1,902 points on Friday, according to the London-based Baltic Exchange. The drop was the 31st straight decline. That's the longest since the 34 sessions to Aug 15, 2001, according to Baltic Exchange prices. Charter rates for all types of ships tracked by the exchange fell.
'We don't see anything in the next two to three weeks that's going to turn the market around,' Guy Campbell, head of dry bulk at Clarkson plc, the world's largest shipbroker, said by phone. 'Everything is centred on China. We are still watching China in terms of where the steel price is going.'
The price of hot-rolled steel in China has declined 17 per cent to 3,909 yuan (S$797) a metric tonne since rising to a 2010 high of 4,698 yuan on April 15, according to prices from Antaike Information Development.
Some of the nation's mills are shuttering blast furnaces for maintenance and others are relying on existing stockpiles instead of imports, Michael Gaylard, strategic director at Freight Investor Services Ltd, said by phone from Shanghai.
Iron ore creates the single-biggest source of demand for dry-bulk shipping, according to data from Clarkson's research unit. Trade in the steelmaking ingredient will total 996 million tonnes this year. Coal is second-largest at 865 million tonnes of seaborne trade. Grains are 315 million tonnes.
'It's a very difficult picture as far as miners are concerned trying to put together sales' of the raw material, Mr Gaylard said. The present slump in shipping costs 'is going to continue for July at least', he added.
Charter rates may start to recover starting in September once Chinese mills have worked through iron ore stockpiles and need to accelerate purchases again, Clarkson's Mr Campbell noted.
Rental rates fell 2 per cent to US$15,679 a day for panamax vessels, the largest to navigate the Panama Canal, according to the exchange. They declined 3 per cent, to US$17,643, for capesizes, so called because they have to travel around South Africa's Cape of Good Hope or South America's Cape Horn to deliver consignments.