Australia Ship Delays Climb on Iron Ore Price Accord, SSY Says

July 16, 2008

July 16th (Bloomberg) – The number of ships delayed at ports in Western Australia increased, a sign that a price accord between iron ore miners and Chinese steelmakers has boosted demand for the raw material, Simpson, Spence & Young Ltd. said.

Vessels are being delayed an average of six days at western Australian ports, the highest so far this year, London-based Simpson, Spence, the world’s largest private shipbroker, said in an e-mailed note today.

“This would appear to be a result of a revival in Pacific iron ore chartering activity following the agreement of contract prices between Australian miners and Asian steelmakers,” the report said.

Mining companies BHP Billiton Ltd. and Rio Tinto Group won 97 percent price increases for iron ore supplied to Asian steelmakers in 2008.

The cost of hiring ships that can sail fully loaded through the Panama canal and of carriers the next size up that must go around Chile’s Cape Horn are being “supported by booming global coal markets,” the report said. U.S. exports of the fuel were the highest for more than 10 years in May, the report said.

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