COAL and iron ore are costing less to ship and handle around the world, as China’s demand for steel-making raw materials declines.
Analysts say the Baltic Dry Index, which is a measure for the costs of shipping commodities, has dropped 62 points to 1846 points. This drop was mostly driven by a reduction in rents for panamax and capsize ships, which are used to transport iron ore.
The index has dropped three times since February 2009, and seen a 10% slash in shipping costs. It is indicative of the dire straits of the commodity shipping market, brought on by the economic crisis and the plateau in steel demand.
Iron ore producers all over the world have cut production and halted plants, while Rio Tinto says heavy rain is disrupting its iron ore ship loading at the Dampier and Cape Lambert ports in Western Australia.
Add a comment