Following China’s announcement of special port fees for U.S. vessels, the market anticipates rising shipping costs. On Monday (October 13), the Baltic Exchange’s dry bulk shipping index hit a two-week high.
The benchmark index, which tracks freight rates for Capesize, Panamax, and Supramax vessels, rose 208 points (10.7%) to 2,144 points on the day, hitting its highest level since September 29.
Today (October 14), China’s countermeasure imposing special port fees on U.S.-owned, U.S.-operated, U.S.-built, or U.S.-flagged vessels officially took effect. This constitutes a strong response to the U.S. port fee policy targeting Chinese vessels that also came into force on the same day.
Jefferies analysts noted in a report: “Recent geopolitical developments may trigger further disruptions. With carriers raising freight rates to address potential disruptions, container freight rates have room to rise in the near term.”
The Capesize index climbed 593 points (a 21.2% increase) to 3,392 points, hitting its highest level since September 29. The daily earnings for this vessel type rose by $4,916 to $28,132.
Iron ore futures prices rose as robust steel exports from China, the world’s largest consumer, and a decline in iron ore shipments offset concerns over renewed escalation in U.S.-China trade tensions.
The Panamax Index rose 42 points to 1,806 points. The daily earnings for this vessel type increased by $384 to $16,257.
For smaller vessels, the Post-Panamax index fell 2 points to 1,400 points.