Earnings of smallest bulkers fall to lowest in 33 months
Earnings from the world’s smallest commodity ships fell to the lowest level in almost three years as the vessels miss out on a boom in Chinese iron ore demand that buoyed rates for larger carriers.
Hire costs for handysizes that haul at most 35,000 metric tons of cargo slid for a 22nd day, declining $2 to $8,389 a day, according to the data from the Baltic Exchange in London. The ships, which move cargoes from grains to lumber, are down 31 percent this year compared with a 57 percent rally in rates for capesize carriers that are at least four times bigger and transport iron ore.
China, growing more than three times faster than the global average, will import 10 percent more of the ingredient used in steelmaking this year, according to economists’ forecasts compiled by Bloomberg and data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. While that bolsters demand for both capesize and handysize vessels, the smaller ships have a wider cargo mix, meaning they benefit less.
“China is taking a large amount of iron ore even though the world is still going through significant economic trouble,” Jeffrey Landsberg, president of Commodore Research in New York, said by phone yesterday. “Handysizes are more susceptible to changes in the developed world.”
Ten percent of the global fleet of handysizes is bound for the Asian country, compared with 21 percent of capesizes, according to ship-tracking data compiled by Bloomberg for carriers signaling arrival dates within the next month. Almost half of the capesize fleet is sailing for China or for Australia or Brazil, the two largest iron ore exporters, compared with 18 percent of handysizes, the data show.
The Baltic Dry Index, a measure of commodities shipping costs, fell for a sixth day, sliding 0.4 percent to 1,878 points on losses in all four types of ships tracked by the gauge.
Hire costs for handysizes that haul at most 35,000 metric tons of cargo slid for a 22nd day, declining $2 to $8,389 a day, according to the data from the Baltic Exchange in London. The ships, which move cargoes from grains to lumber, are down 31 percent this year compared with a 57 percent rally in rates for capesize carriers that are at least four times bigger and transport iron ore.
China, growing more than three times faster than the global average, will import 10 percent more of the ingredient used in steelmaking this year, according to economists’ forecasts compiled by Bloomberg and data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. While that bolsters demand for both capesize and handysize vessels, the smaller ships have a wider cargo mix, meaning they benefit less.
“China is taking a large amount of iron ore even though the world is still going through significant economic trouble,” Jeffrey Landsberg, president of Commodore Research in New York, said by phone yesterday. “Handysizes are more susceptible to changes in the developed world.”
Ten percent of the global fleet of handysizes is bound for the Asian country, compared with 21 percent of capesizes, according to ship-tracking data compiled by Bloomberg for carriers signaling arrival dates within the next month. Almost half of the capesize fleet is sailing for China or for Australia or Brazil, the two largest iron ore exporters, compared with 18 percent of handysizes, the data show.
The Baltic Dry Index, a measure of commodities shipping costs, fell for a sixth day, sliding 0.4 percent to 1,878 points on losses in all four types of ships tracked by the gauge.
