June 28 (Bloomberg) — Shipping rates for iron ore rallied for the longest since 2006, as record fleet growth slows amid speculation that demand is rising to deliver the steel-making commodity to China.
Costs for Capesize ships carrying 160,000 metric tons jumped 3.4 percent to $15,025 a day, according to the Baltic Exchange in London, a publisher of rates on more than 50 trade routes. Prices have risen for 17 sessions, the longest rally since August 2006. The Baltic Dry Index, which also spans smaller ships, added 1.7 percent to 1,171 points.
The advance adds to signs the worst of a rout in rates may be ending as record fleet growth slows. Supply of the vessels, which expanded by a record 82 percent between 2008 and 2012, increased 3.3 percent this year, according to data compiled by Bloomberg. Earnings from the vessels jumped almost threefold since the end of May, reversing the worst start to a year on record, according to data from the bourse.
“Fleet growth is so much lower than it has been in the last few years and the demand has been good,” said Jeffrey Landsberg, managing director of Commodore Research, a New York- based adviser to ship owners. “Last week we had a strong surge in iron-ore fixtures to China. This week has been less, but still enough to help freight rates move up.”
Rates advanced for all four vessel types tracked by the exchange. Panamaxes, about half the size of Capesizes, climbed 1.3 percent to $8,007 a day. Supramaxes transporting about 50,000 tons rose 0.4 percent to $9,973; Handysizes, the smallest tracked by the exchange, added 1 percent to $8,272.
China has 71.9 million tons of iron ore at its ports, the least for the time of year since 2010, according to data from Beijing Antaike Information Development. The 68.56 million tons it imported last month were the highest for the time of year on record, customs data show.
Copyright 2013 Bloomberg.