Capesize rates have risen strongly since August this year. The Baltic Capesize index has been in the doldrums for most of the year – averaging only just over $6,000 per day for the first six months of this year. July and August’s Baltic Capesize Index averages were both over $13,000 per day. But the big rise came in September, when the Baltic Capesize Average Index averaged over $30,000 per day.
China’s strong steel production sector resulted in a record import of 74.5M tons of ore in September, 8% higher than in August, and a 15% increase over last year. The cost of shipping iron ore is set to rise to a 3-year high, due to the increase in demand from China. In the last 3 weeks of September, the capesize average rates fluctuated between $29,000 and $38,000, peaking at a little more than $42,000 on the 25th.
China, who imports more iron ore than any country in the world, is expected to increase its imports in the coming months. And freight rates have risen accordingly, as iron ore from Australia, Brazil and South Africa pour into China.
While the market has cooled in the last two weeks, the Baltic Capesize Index average for the month of October thus far is still averaging over $34,000 per day.