Hong Kong: London's Baltic Dry Index closed up another 250 points to 11,709 yesterday. Rising steel prices - up 50% this year and climbing - have seen mills in China churn out more metal lately. The Australian newspaper reported BHP Billiton appears to have moved to exploit the Chinese boycott of its rival Rio Tinto on spot iron ore markets by chartering a 17 capesizes last week alone, way more than the standard nine it takes in a month.
Moreover, the enormous earthquake that struck the inland province of Sichuan in China has led the mainland to import more to make up for loss of domestic production. Jefferies analyst Douglas Mavrinac told Forbes this week that lack of supply from earthquake-devastated regions will mean seaside areas will need more imports that come via ships. "Essentially all of those nonfundamental factors that caused rates to decline in the first quarter are no longer an issue and rates are back to October/ November levels," Mavrinac said. [20/5/08]
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