UNITED KINGDOM August 23 2016 3:31 PM
LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities gained to 687 points on Monday driven by strong cape, panamax and supramax rates.
The Baltic Dry Index, which provides an assessment of the price of moving the major raw materials – such as coal, iron ore and grain – by sea by taking in 23 shipping routes measured on a time charter basis, up by 04 points to 687 points on Monday.
Supportive for the BDI are hopes that demand will remain robust even as the year winds down, and this is backed up by expectations that China will increase its imports for coal as it cuts down on domestic coal production, yet still has demand for coal, particularly when it prepares for winter.
Another bullish factor for the BDI is the expectation that Australia will continue to ramp-up iron ore production, and China will accelerate imports ahead of the winter season.
A key iron ore project in Australia, Roy Hill, is ramping up more quickly than expected and should approach its maximum capacity near the end of the year, and as production approaches full capacity, the mine will want to increase exports.
Solid demand to move iron ore from Australia to China has already contributed to the rebound in BDI prices since they hit a record low last February.