Holidays' end pushes shipping prices upwardPost by David Elliott on 28th September 2010 in Shipping The end of a holiday period in China, and a resulting surge
in demand, has seen commodity shipping prices bounce back strongly after a
period of falls.
Reuters news agency reported that the main index of shipping
prices from London's Baltic Exchange rose by more than two per cent over a day,
as demand from Chinese firms for shipping capacity, known as Capesize, raced
ahead.
"The Chinese market, and Capesize in particular, has
seen a lot more activity this week, as they are caught between last week's
festivities and China's national holiday on October 1, which will see most of
the country on vacation," one source told Reuters news agency.
The rush to beat the holiday had caused congestion at many
ports, which in turn had given the upward surge in the exchange's BADI index
further momentum.
Prior to this week's gains, the BADI index had fallen for 10
successive days, to its lowest level since early August.
Since then, coal traders have been buying up capacity in
order to be covered against potential rises in power prices brought on by the
onset of winter.
"Coal is one of the most important products carried by
freight ships, so if the increase in coal prices lasts, we are likely to see an
upward correction in freight rates too," one coal trader told Reuters.
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