Baltic Dry Index crosses 10,000 mark for first time since December

London: The Baltic Dry Index climbed above 10,000 points yesterday for the first time since December, bolstered by speculation that Chinese steelmakers are adding to iron-ore stockpiles. BHP Billiton Ltd., the world's largest miner, is still in talks over annual iron-ore prices with Chinese steelmakers, more than a month after they were due to finish.

DryShips Inc., with a fleet of 38 dry-bulk carriers, rose to the highest since November 2007 in New York trading. The 12- member Bloomberg Dry Ships Index advanced for a fifth day, adding to four consecutive weekly gains.

''The market is very, very close to equilibrium in terms of demand and supply,'' said Alex Gray, London-based chief executive officer of Clarkson Securities Ltd., a unit of the world's biggest shipbroker. ''What we are seeing at the moment is a building up of pressure around iron-ore shipments and grains.''

The Baltic index rose to a record in November because of Chinese demand for commodities including coal and iron ore. The nation, the world's most populous, is also the biggest consumer of metals including copper, nickel, zinc, tin and aluminum.

The index, tracked by banks including Merrill Lynch & Co. and UBS AG as an economic indicator, rose 249 points, or 2.5 percent, to 10,104 points, according to the Baltic Exchange in London. That's the highest since Dec. 7 and 9.3 percent below the record 11,039 reached Nov. 13. Prices have advanced for four consecutive weeks, the longest winning streak since October.

Chinese Ports

Iron-ore stockpiles held at Chinese ports reached a record 61.91 million metric tons on April 18 because buyers increased imports on expectations prices will rise, the China Iron and Steel Association said April 29. Iron ore is mostly sold on annual contracts with prices set once a year.

''It means they can go two months just running stockpiles down until they get realistic price negotiations going,'' Gavin Durrell, a Cape Town-based official at Island View Shipping, Africa's largest commodities shipping line, said by phone. [8/5/08]

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