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Shares of Chinese shipping companies and port operators rally on Wednesday as Baltic Dry Bulk Freight Index posted its biggest one-day jump since early February. An index tracking shipping firms compiled by Wind Information is surging 1.7% as of 11:10 am local time, making it the best-performing sector in the A-share market, compared to 0.8% loss for the benchmark Shanghai Composite Index. Port operators are also outperforming.
COSCO Shippping Specialized Carriers is surging by the daily limit of 10%, Jinzhou Port up 8.1%, Nanjing Tanker up 5.7%, COSCO Shipping Energy Transportation up 4.8%.
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, notched up its biggest daily jump in seven months, powered mostly by a 43% jump in the larger capesize segment.
The overall index, which factors in rates for capesize, panamax, and supramax shipping vessels, rose 12.1%, its biggest gain since early February, to 1,408. The capesize index gained 323 points, or 43%, to hit its highest since mid-August at 1,079. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron-ore used in construction, rose by $2,682 to$8,952.
Market conditions are expected to improve for the rest of 2022 and further in 2023 as the EU’s ban on Russian coal will add tonne miles, as Russian coal is likely to be replaced by imports from U.S., Australia, Colombia and South Africa, BIMCO said in a quarterly note. “Barring any significant adverse rest-of-year impacts from a slowing global economy, we estimate that volume growth in 2022 will end in the 1-2% range and estimate growth of 2-3% in 2023,” added BIMCO.
