21-04-2021 Baltic Dry Index hits 10-year high off lofty Capesize spot rates, By Michael Juliano, TradeWinds
The Baltic Dry Index (BDI) reached its highest point in more than a decade, breaking 2,700 points for the first time since October 2010. The BDI came in at 2,710 points on Wednesday, thanks to Capesize bulker spot rates taking a huge leap amid China’s heightened demand for high-quality Brazilian iron ore.
“As reported by Platts, the strong steel prices, and the sintering controls in Tangshan, are resulting in mills favouring higher-quality iron ore fines, which should be supportive of particularly Brazilian output, in our view,” Clarksons Platou Securities wrote in its daily dry bulk market note. “Coal trades are also performing well, supporting both capes and Panamaxes.”
Coal exports from South Africa jumped 63% week over week to 1.8mt, while US shipments jumped 45% to 2.6m tonnes, Clarksons noted. The Capesize 5TC, a weighted average of spot rates on five key routes, jumped 25% on Wednesday to $33,290 per day, according to the Baltic Exchange.
“Fixture and trading information was heard swirling throughout the day as widespread valuations and insinuations fanned the flames keeping the market on a boil,” the Baltic Exchange wrote on Wednesday. “Post index brought some silence but momentum will surely continue to push capes to year highs.”
NYK Line has hired the 180,184-dwt Elizabeth II (built 2007) at $33,290 per day for a 10-month to 12-month fixture in the Far East starting in June. “With strong steel prices, iron ore trades are expected to be well supported going forward,” Clarksons wrote.
“Australian miner BHP today guided that annual iron ore production is now expected to be in the upper end of its forecast of 245 mt to 255m tonnes.”