The Baltic Dry Index, a measure of shipping costs for commodities, had its first weekly drop in almost two months on reduced demand for so-called capesize vessels to haul iron ore for making steel.
Rio Tinto Group, the biggest shipper of ore from Australia, said on Feb 23 it may delay cargoes after rains flooded railways linking mines to ports, according to a company letter obtained by Bloomberg. Spokesman Nick Cobban has said Rio's policy is not to comment on so-called force majeure, a legal clause permitting deferrals for incidents outside suppliers' control.
The index fell 113 points, or 5.4 per cent, to 1,986 points last week, according to the Baltic Exchange, the first such decline since the week ended Jan 2. The gauge still has more than doubled this year after collapsing in 2008 as steel demand slumped and the global economy worsened.
'The capes came off because of the force majeure-type problems in Australia,' said Steve Rodley, a London-based director of shipping hedge fund M2M Management Ltd. Overall, 'things are better than they were, but we're not on a space rocket to the moon, and the global situation for steel is not good enough'.
Steelmakers account for almost half of all dry-bulk cargo, according to shipper Golden Ocean Group Ltd. Weaker demand from carmakers and builders has forced steel industry leader ArcelorMittal and competitors to cut production. Global output of the metal fell 24 per cent from a year earlier last month, according to the World Steel Association. The index gained 36 points, or 1.9 per cent, on Friday after declining 7.1 per cent in the prior four days.
Rio Tinto Group, the biggest shipper of ore from Australia, said on Feb 23 it may delay cargoes after rains flooded railways linking mines to ports, according to a company letter obtained by Bloomberg. Spokesman Nick Cobban has said Rio's policy is not to comment on so-called force majeure, a legal clause permitting deferrals for incidents outside suppliers' control.
The index fell 113 points, or 5.4 per cent, to 1,986 points last week, according to the Baltic Exchange, the first such decline since the week ended Jan 2. The gauge still has more than doubled this year after collapsing in 2008 as steel demand slumped and the global economy worsened.
'The capes came off because of the force majeure-type problems in Australia,' said Steve Rodley, a London-based director of shipping hedge fund M2M Management Ltd. Overall, 'things are better than they were, but we're not on a space rocket to the moon, and the global situation for steel is not good enough'.
Steelmakers account for almost half of all dry-bulk cargo, according to shipper Golden Ocean Group Ltd. Weaker demand from carmakers and builders has forced steel industry leader ArcelorMittal and competitors to cut production. Global output of the metal fell 24 per cent from a year earlier last month, according to the World Steel Association. The index gained 36 points, or 1.9 per cent, on Friday after declining 7.1 per cent in the prior four days.