Baltic Dry Index raises hope for rebound

The Baltic Dry Index, a measure of shipping costs for commodities, lost the least in a nine-day slide, possibly signalling a rebound later this week. The index tracking transport costs on international trade routes dropped 10 points, or 0.3 per cent, to 2,975 points, according to the Baltic Exchange. Rates for capesizes that can transport about 175,000 tonnes of goods fell 1.2 per cent, the smallest drop this month. All other vessel classes gained.
'With steel price-firming accelerating, the dry bulk market could resume normal levels of activity this week,' Omar Nokta, Dahlman Rose & Co's head of research in New York, wrote in a note on Monday. Beijing prices for rebar used to reinforce concrete have risen 5.3 per cent this month, possibly showing higher demand for the metal and raw materials to make it.
Iron ore and coal to make steel will account for 35 per cent of all dry-bulk commodities transported by sea this quarter, forecasts from Drewry Shipping Consultants Ltd in London show.
Demand for the materials from China, the world's biggest steelmaker, helped the index more than double in both the first and second quarters, the best six-month showing for records on Bloomberg going back to 1985.
Cash prices for iron ore delivered to China jumped to a nine-month high. Ore for immediate delivery advanced 5.5 per cent to US$87 a tonne in the week ended July 10, according to Metal Bulletin prices for 63.5 per cent ore. That's the highest since Oct 10.
Daily capesize rates fell to US$50,594 on Monday, according to the Baltic Exchange. They will average US$48,250 a day this quarter, according to forward freight agreements used to bet on or hedge against future prices.

Source: Bloomberg