Capesize paper market jumps 25%

Capesize paper spiked 25% yesterday as China’s relentless demand for iron ore shipments saw transatlantic spot rates from Brazil jump by more than US$10,000 in one day.

Rates at these levels are the highest in more than eight months, and propelled the Baltic Dry Index by 7.5% to 3,164 points.

The BDI has doubled in the last month and now stands at almost six times higher than its record low of 663 points in December.

Chinese traders have been shipping as much as 6m tonnes of iron ore each week, leading to congested unloading ports and delays of up to 30 days for ships, according to brokers.

There have been only 10-15 capesizes immediately available to load iron ore from Brazil over the next 30 days, from the global fleet of 855, according to London shipbrokers Icap Shipping.

“This is ridiculously low and it has been this low during the last two months,” Icap’s head of dry freight research, Georgi Slavov, said.

June capesize contracts were also up yesterday, from US$49,319 to US$62,000, derivatives broker Imarex told Lloyd's List.

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