THE BALTIC Exchange’s leading shipping index leapt to a new three-month high on Friday, what brokers credited to China resuming iron ore imports.
The London-based index, which gauges prices to ship resources like iron ore, cement, grain, coal and fertiliser on major export routes, rose 9.61% to 1642 points from 1498 on Thursday.
Shipping brokers questioned whether or not this rise was long term one, as the index revealed no push from anywhere else other than China.
According to BHP Billiton Plc, a build-up of iron ore stockpiles in China had prompted suppliers to defer millions of tonnes in shipments last year, consequently pushing up spot prices.
Brokers said it was too soon to say whether the rise in the index reflected the start of a recovery in the world economy.
According to traders, the shipping market remains volatile and while the market improvement was enough to allow shipping companies to avoid going out of business, it was still modest. They said the rise in the index simply indicated bulk commodity demands from importers, particularly China.
According to analysts’ estimates, around 68 million tonnes of ore had piled up at Chinese ports by late November with another 125 million tonnes stored at steel mills.
One shipping broker said it was likely that once Chinese ore imports faded again, the index would drop again.
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