Global freight rates for key shipping classes that move bulk commodities and grains are near or at all-time highs due to strong demand for ships to move commodities into China and Asia, freight analysts said.
On Friday, the London Baltic Exchange’s Handymax index was quoted at 33,917 points, its highest level since April 2, 2004, and close to the index’s all- time high of 35,512 points achieved on March 16, 2004.
On the other hand, the Baltic Panamax index was quoted at 6,071 points, off the index’s all-time high of 6,110 points achieved on Thursday.
The Baltic Dry Index was last quoted at an all-time high of 6,134 points.
“Freight rates are back to all-time highs as the industrial business cycle in the Asia Pacific is near the top of the cycle. China’s economy is super-charged and they are importing a lot more commodities, especially dry bulk,” a London-based freight analyst said.
“A supply-side factor that is driving the market higher is the fact that the global shipping industry hasn’t replaced many of the ships that were built in the 1970s.
“After being in balance during the 1990s, when there were sufficient ships available to meet demand, there is now a severe shortage of ships available to move dry bulk commodities and grains due to the strong increase in demand,” he added. – I-Net Bridge