Comments
The coronavirus crisis in China has hammered many markets this month: none may have felt a bigger impact than freight, reflecting consequences for raw materials, including iron ore that are carried by sea.
The Baltic Exchange Capesize Index – a measure of vessels for dry-bulk cargoes – sank to just 1 on Thursday. That is down 99.95 per cent this month. The wider Baltic Dry Index more than halved in January to hit the lowest since 2016.
Weakness is expected to persist amid uncertainty about how long the virus effects will last, said Ralph Leszczynski, head of research at shipbroker Banchero Costa & Co. Seasonally, rates are already low in January because of the Lunar New Year and lower demand out of Brazil on bad weather, and the virus is an added bearish factor, Leszczynski said.
Iron ore is the biggest dry-bulk cargo by volume, with annual seaborne flows totalling about 1.6 billion tonnes as vessels carry the key steel-making ingredient from giant mines in Brazil and Australia to users in China and Europe.
Miners have downplayed concerns. Australias Fortescue Metals Group Ltd said concern over the virus is impacting sentiment rather than the physical trade in iron ore. Separately, Brazil’s Vale SA said operations at Asian ports are normal.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.