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The
Baltic Exchange's main sea freight index, which
tracks rates to ship dry commodities, rose to a
near two-month high on Friday with tighter
vessel supply and cargo demand boosting
sentiment.
The overall index, which gauges the cost of
shipping resources including iron ore, cement,
grain, coal and fertiliser, rose 1.49 per cent
or 40 points to 2,728 points on Friday in a
second straight session of gains and was at its
highest since August 17.
"There appears to be a shortage of tonnage,"
Nigel Prentis, a director with HSBC Shipping
Services Ltd, said.
Prentis said there was stronger demand for iron
ore in Europe, South Korea, Japan and Taiwan
with congestion at Australian coal loading ports
also helping freight rates.
"That all seems to be sufficient to push it up,"
he said.
Brokers said there had been iron ore cargoes
fixed from both Brazil and Australia to China,
which had also turned sentiment more positive in
the latter part of the week.
The main sea freight index hit a more than
eight-month high on June 3 of 4,291 but has been
erratic since then.
In recent months Chinese demand for iron ore -
the primary material in the manufacture of steel
- has dominated freight market activity while
adding to swings on the main index.
Demand for the larger Capesize ships, typically
hauling iron ore and coal cargoes, also boosted
gains on Friday.
"The Atlantic this week has seen a real push. A
better level of enquiry within the basin has
seen shorter supply of tonnage," the Baltic
Exchange said in a weekly report referring to
the Capesize market.
The Baltic's Capesize index rose 2.06 per cent
on Friday, also notching up a second session of
gains.
"This week we have seen how volatile the Cape
market can be at times with rates in both the
Atlantic and Pacific seemingly falling and
rising in quick succession," Braemar Seascope
said in a report.
Concerns have grown over the rising number of
new ships set to hit the market in 2010 despite
indications of some vessel cancellations and
delays, analysts said.
The value of second hand ships has continued to
drop in recent weeks as new vessels come on
stream and scrapping activity has dropped. -
Reuters
Source: NST
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