Ocean freight rates for dry commodities on major Asian routes were steady on Tuesday, shrugging off a sell-off in futures, suggesting that the market is well supported by tight tonnage supply and strong demand.
The London Baltic Exchange's main price index, which tracks benchmark trading routes world-wide for commodities such as iron ore, cement, grains and sugar, rose 462 points from the previous week, to settle at 10,995 points on Monday.
"We see that although there is a sell-off on some futures routes, the physical market still reflects the underlying fundamentals in the market, which is that tonnage supply is still tight," a Hong Kong-based shipbroker said. Period charter rates for modern Panamax plying the trans-Pacific were valued at $95,000, little changed from a week ago. Shipping freight on the route continues to be more than three times this year's low of $30,592.
A voracious appetite for raw materials from China and India have kept dry bulk freight rates well supported. China, the world's top buyer of iron ore, imported 29.77 million tonnes of the raw material in October, down 10.4 percent from September, official Customs figures showed on Monday.
Despite the drop, China imported 313.75 million tonnes of iron ore in the first 10 months of the year, a jump of 16.6 percent year-on-year, keeping freight rates on the boil. "It's still been a strong year for demand. The lower import figures in October could be because China is in negotiations with iron ore suppliers now," a shipbroker said.The Baltic Exchange's Panamax Index settled at 11,368 on Monday, up 165 points from the previous week.