- The Baltic Dry index, a gauge for global bulk shipping rates, hit an over 11-year high on Thursday after China’s second-largest container port remained partially shut following detection of coronavirus infections.
- Chinese port of Ningbo-Zhoushan was forced to shut its Meidong terminal on Wednesday.
- This followed after a worker tested positive for COVID-19 despite being fully inoculated with two doses of the Sinovac vaccine, the South China Morning Post reported.
A recent news article published in the Capital news source says that Baltic Dry index hits decade high on China port closure.
Congestions across neighbouring ports of Shanghai and other terminals at Ningbo-Zhoushan port followed as container vessels re-routed away from the closed Meidong terminal.
Congestions at ports
The Ningbo-Zhoushan port is ranked the third busiest port in the world after Shanghai and Singapore, according to ING.
“This will affect imports as well as exports. September is usually the peak month for exports, and the experience from Yantian port’s congestion tells us that clearing the ensuing freight congestion could take at least 4 weeks,” said Robert Carnell, regional head of research (Asia-Pacific) at ING.
“This could affect the delivery of goods for Black Friday shopping in the west,” added Carnell.
Highest since June 2010
“The port at Zhoushan is important for imports of commodities like crude, gas and coal (sounds like Australia could be hit hard by this),” ING wrote, suggesting further implications of the terminal closure.
These disruptive developments pushed the BDI Baltic Dry Index to its highest since June 2010 on Thursday.
The benchmark’s Friday move are still to be accounted for as data for the index is only updated at the end of the day.
Shipping firms rose on Thursday
Shares of shipping companies across the world rose on Thursday, with COSCO Shipping’s Hong Kong-listed shares closing nearly 9% higher, as investors expected them to profit from higher freight charges.
Hamburg-based Hapag Lloyd jumped 5.8% and Nasdaq-listed shares of AP Moeller-Maersk rose 2.4% overnight on Thursday.
“Both the Baltic Dry Freight Index and composite container freight indices are already at recent highs and looking to push higher. Higher transportation costs can only add to already-high pricing pressures for final demand and intermediate goods,” Carnell added.
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Source: Capital
