The Baltic Capesize Index (BCI) advanced by 1 point to 186 today as iron ore chartering activity stirred, ending the index’s consistent rout seen since January 6.
The weak upwards trend wasn’t enough to halt the Baltic Dry Index’s (BDI) freefall, however. The BDI declined a further 5 points to 358 today, and has hit a record low every day for the past 14 consecutive trading days.
The BCI’s bounce has been helped in part by strengthening rates on the Gibraltar/Hamburg transatlantic round voyage (C8_14). The benchmark capesize route today saw a $130 increase in timecharter average (TCA) rates, which were assessed at $2,810 per day.
The China-Japan transpacific round voyage (C10_14) and the China-Brazil round voyage (C14) capesize benchmark routes also saw growth. Their respective TCA rates were today assessed at $1,986 and $3,059, both $27 higher than yesterday.
Iron ore is the key driver behind the uptick. Traders in China are stockpiling iron ore ahead of the Chinese New Year holidays. Steel inventories in the country are reportedly low, while mills’ profitability is improving, feeding China’s appetite for ore imports.
The capesize spot market is still dominated by iron ore cargoes from Western Australia bound for China. Shipment from Brazil has stalled due to heavy rain, and production has stopped at BHP Billiton’s joint venture with Vale in Brazil in the wake of November’s dam disaster.
Today, Rio Tinto is reported to have fixed three capes for the Western Australia-China trip; Trafigura has booked another, as have BHP Billiton, Shourong and Hyundai Glovis.