Baltic Dry Index Matches All-Time Low

By Naomi Christie

(Bloomberg) — Commodity delivery prices matched a document low set 28 years in the past as China’s slowing demand for coal and weaker bookings earlier than the Asian nation’s New Year holidays compounded a fleet glut.

The Baltic Dry Index slid 0.9 p.c to 554 factors, the identical stage it fell to in July and August of 1986, in accordance with knowledge on Monday from the Baltic Exchange in London. Day charges declined for many ship sorts monitored.

China’s seaborne coal imports slid 10 p.c in 2014, reversing progress of 16 p.c the yr earlier than, in accordance with Clarkson Plc, the world’s largest shipbroker. The Chinese financial system, which buys virtually half the world’s coal and ore cargoes, will develop in 2015 on the slowest tempo in 25 years, economists’ forecasts compiled by Bloomberg present.

“Demand is growing at a sluggish rate,” Erik Folkeson, an Oslo-based analyst at Swedbank AB, stated by telephone, including that demand is being additional eroded earlier than New Year holidays in China that begin later this month. “Coal first of all, and the data that we’ve seen on Chinese iron ore imports has suggested a slowdown in January.”

Ship house owners ordered three-times extra dry bulk ships in 2013 than a yr earlier in expectation of rising coal demand in China, in accordance with Jeffrey Landsberg, managing director of Commodore Research, a New York-based adviser to ship house owners. Those vessels are actually being delivered to the market and competing for cargoes, driving charges down.

“Chinese coal imports have fallen dramatically,” he stated by telephone Monday. “They’re not nearly as high as ship owners expected when those vessels were ordered.”