Baltic Exchange’s main sea freight index jumped 11% on Friday as high Chinese coal demand drove up capesize rates, reports Baltic NewsDesk.
Coal demand and Capesize rates
The Baltic Exchange’s main sea freight index jumped about 11% to its highest in nearly three months on Friday as high Chinese coal demand drove up capesize rates.
The Baltic dry index leaped 158 points, or nearly 11%, to 1,606, its highest since Oct. 14, 2020.
The main index was up about 17.6% for the week, its highest jump since early October last year. The capesize index jumped 426 points, or about 20%, to 2,548, a peak since Oct. 15, 2020.
Best in 3 months
The index firmed about 27% this week, its best weekly performance in over three months.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, gained $3,533 to $21,131.
China’s iron ore futures
China’s iron ore futures marked their first weekly gain since mid-December as steel mills and traders replenished stocks of the steelmaking ingredient ahead of the Lunar New Year holiday.
Jump in the capesize index
What is the reason?
Peter Sand, chief analyst for shipping association BIMCO siad, a cold spell in China and off-season, record high demand for power across Chinese grids have caused the sharp jump in the capesize index.
A volatile segment
However, it is not expected to sustain as it is a very volatile segment, Sand added.
Exceptionally cold weather has caused a huge increase in power demand in the world’s largest energy consumer.
Panamax index
The panamax index rose 55 points, or 3.7%, to 1,559, its highest level since Sept. 2, 2020.
The index rose 17.66% this week, its most since Aug. 7, 2020.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, gained $498 to $14,031.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Baltic NewsDesk
