Support the Wall Street Examiner! Choose your level of support to receive a free proprietary report as my thanks. Click the button below to see your options. Become a Patron!

Freight Rates Tumbling as 35 Miles of Ships Passes Ore Demand

Freight Rates Tumbling as 35 Miles of Ships Passes Ore Demand
By Alistair Holloway – Jan 10, 2011 8:55 AM ET

At a time when analysts anticipate record profits for the biggest mining companies and a third year of gains in commodity prices, shipping lines carrying raw materials are set for the lowest freight rates since 2002.

Leasing costs for capesizes, 1,000-foot-long ships hauling iron ore and coal, will drop 34 percent to average $22,000 a day this year, according to the median in a Bloomberg survey of eight fund managers and analysts. The last time that happened, China’s economy, the biggest consumer of the minerals used in steel and power, was 75 percent smaller and the benchmark Standard & Poor’s GSCI commodity index 67 percent lower.

While Clarkson Plc, the world’s biggest shipbroker, expects seaborne trade in the two cargoes to exceed 2 billion metric tons for the first time this year, the 7 percent increase won’t be enough to eliminate a glut. About 200 capesizes, spanning some 35 miles end-to-end, will leave shipyards this year, expanding the fleet by 18 percent, the Bloomberg survey showed.

http://www.bloomberg.com/news/2011-01-10/freight-rates-poised-to-tumble-as-35-
mile-line-of-ships-passes-coal-demand.html

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.