China's shipping costs at 18-month high
[LONDON] The cost of shipping iron ore, coal and grains along China's coast rose to an 18-month high as surging imports of the commodities boost demand for vessels to redistribute them between the nation's ports.
The China Coastal Bulk Freight Index measuring the domestic shipping prices for commodities advanced 2.2 per cent to 1,167 points last week, according to data from the Shanghai Shipping Exchange.
It has risen 11 per cent since the start of the year and is now the highest since April 2012.
Demand is rising because the ships are used to transport imported cargoes between the nation's ports.
Bookings to haul iron ore on Capesizes, the largest dry-bulk vessels, rose 51 per cent to 124 last month from August and most will supply the commodity to China, according to data compiled by Morgan Stanley.
China will import 16 per cent more coal by sea this year and an extra 88 per cent of grains, according to data from Clarkson plc, the world's biggest shipbroker.
"There's currently high activity and strong underlying demand in China with solid volumes of iron ore, coal and grain being shipped along the coast in China," Bjorn Kristian Roed, a shipping analyst at Danske Markets in Copenhagen, said by e-mail.
"This improvement in coastal rates corresponds well with the strong import figures seen to China and improvement seen in dry bulk rates."
Rates for Capesizes to carry 160,000 tonnes of iron ore rose to a 34-month high of US$42,211 a day on Sept 25, according to data from the Baltic Exchange.
China's coal imports will total 206.9 million tonnes this year while grain cargoes will reach 17.1 million tonnes for the 2013-14 crop year, according to Clarkson. - Bloomberg
