In context of a notable uptick in China iron ore demands following an ease of forced closure measures, the Baltic Exchange’s main sea freight index that keeps track of rates of ships ferrying the dry commodities across the globe, had registered its largest weekly percentage gain ever last week, underscoring a sharp rebound in global commodities trading alongside stable industrial activities in China last month.
In point of fact, the 35-year old Baltic sea freight index, that comprises of the rates for capsize, supramax and panamax ships, had logged a giant weekly leapfrog of 300 per cent last week after plunging to a record low of 393 points last month when the global-scale pandemic outbreak had nearly stalled the world’s economic activities.
Baltic sea freight index logs record weekly percentage gain as China’s steel mill demand roars back
Citing statistics, the Baltic sea freight index had posted a 1.8 per cent gain to hit a six-month high of 1,555 on last week’s closing bell, marking up a record weekly surge of 68.5 per cent, while the Baltic index for capsize vessels which could carry up to 180,000 deadweight tonnages had climbed 150 per cent this week to 3,819, its highest level in roughly nine-months.
Besides, the average daily earnings of the capsize vessels had also increased by $231 to $25,511. Meanwhile, adding that the sharp upward spiral in Baltic sea freight index was mostly catapulted by an unprecedented scale of demand surge from China for iron ore alongside an increase in iron ore outputs and exports in Brazil, a Vice-President at Jefferies equity research, Randy Giveans said, “The length of the rally will all depend on how aggressive China is in restocking their depleted inventories as well as the ongoing recovery and stimulus activity in Asia.
Most of the strength is due to increased Chinese steel mill demand for iron ore coupled with the increased production and exports out of Brazil. ”