London: Panamaxes have led a strong revival in bulk fortunes over the past few days. The Baltic Dry Index yesterday rose to the highest since October 9 on demand to ship South American grains.
The index advanced 37 points, or 1.7 percent, to 2,262 points, according to the Baltic Exchange. Rates to panamax vessels climbed 3.9 percent and have jumped 59 percent on a nine-day run to $18,562 a day. Larger capesize ships shed 0.4 percent to $28,382 a day.
Rainfall in Argentina, the third-largest soybean producer after the U.S. and Brazil, will "contain damage" to the crop, the Buenos Aires Cereals Exchange said March 6, raising its estimate for this year's harvest. That may boost exports. The country harvests the crop from March to June. Soybean and corn output in Brazil will drop less than previously forecast this year following rainfall, the Agriculture Ministry said today.
"Grain cargoes and large volumes out of especially South America" are supporting panamax rates, Lars Erich Nilsen, an Oslo-based analyst with specialist investment bank Fearnley Fonds ASA, said in a phone interview with Bloomberg. "On the other hand, the iron-ore market, which is the underlying driver for capesizes, is not in a particularly" good shape, he said.
Iron-ore stocks in China, the world's biggest steelmaker, have jumped 1.2 percent this year while domestic prices for hot- rolled steel sheet, a benchmark steel product, fell 7.7 percent.
"With steelmakers looking to cut production again, iron ore purchases have been reduced and there are reports of distress sales and offers by iron-ore traders," Jim Lennon, a London- based analyst with Macquarie Group Ltd., wrote in a report. "We would expect exports from India to contract once again in coming months."
New york financier Dahlman Rose warned in a note yesterday that officials from the China Iron and Steel Association "have indicated potential steel production cuts in China, leading to a possible slow down in activity in the intermediate term. Chinese iron ore inventories have edged higher to 60.6 million tons compared to 59.3 million tons last week." [10/03/09]
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
