Freight Up Again
The Baltic Dry Index, which measures drybulk shipping rates on 40 routes across the world, jumped more than 10 percent yesterday to close at 1,815. That was an increase of 173 points from Friday, the index's biggest one day leap since rates bottomed at 663 in December, and it's 15th consecutive daily gain.
The index rose more than 50% last week on talk of renewed demand for vessels as credit lines begining to open again. Chinese demand for Brazilian iron ore is being cited as the trigger for the recent surge, along with Australia finally getting a decent wheat crop after two years of drought.
There are fewer vessels available on the market as shipping companies have drawn in their horns, sending vessels into dry dock for much-needed repairs rather than plying the seas at heavily discounted rates.
The recent phenomena of storing cheap commodities at sea, has also led to a reduction in available freight.
Eastern Australia is not normally a big wheat exporter, shipping just 800,000mt last year, but that figure could leap to more like 3mmt in 2009, according to some shippers. It is now virtually impossible to get a vessel any earlier than the end of April to ship grain out of Australia's eastern seaboard, and shipping to the Middle East now costs $25/tonne, up sharply from $15/tonne two months ago, brokers say.
Meanwhile rates on the fronthaul route, shipping cargoes from Europe to Asia via east coast South America or the US Gulf, have risen nearly $3,500/day in the last week.
The index rose more than 50% last week on talk of renewed demand for vessels as credit lines begining to open again. Chinese demand for Brazilian iron ore is being cited as the trigger for the recent surge, along with Australia finally getting a decent wheat crop after two years of drought.
There are fewer vessels available on the market as shipping companies have drawn in their horns, sending vessels into dry dock for much-needed repairs rather than plying the seas at heavily discounted rates.
The recent phenomena of storing cheap commodities at sea, has also led to a reduction in available freight.
Eastern Australia is not normally a big wheat exporter, shipping just 800,000mt last year, but that figure could leap to more like 3mmt in 2009, according to some shippers. It is now virtually impossible to get a vessel any earlier than the end of April to ship grain out of Australia's eastern seaboard, and shipping to the Middle East now costs $25/tonne, up sharply from $15/tonne two months ago, brokers say.
Meanwhile rates on the fronthaul route, shipping cargoes from Europe to Asia via east coast South America or the US Gulf, have risen nearly $3,500/day in the last week.
