GLOBAL miners and commodity traders are using multiple strategies to lock in favorable rates for shipping costs, anticipating a freight market recovery after years of turmoil.

    Ship owners ordered large numbers of vessels between 2007 and 2009, just as the global economy sank into crisis. Prospects have brightened in recent months, with a pickup in global trade helping to absorb the ship glut.

    Iron ore deliveries to top consumer China are up 21 percent in the first four months of 2014 against the same period last year and are expected to rise further as major suppliers boost output and Chinese mills switch from lower quality domestic ore to higher grade and less polluting imports.

    This is likely to bolster demand for larger capesize ships. Dry bulk shipping activity, involving the transport of major commodities such as coal and iron ore, is often taken as a leading indicator of overall global economic health.

    Anglo American, the world’s fifth largest diversified miner, is among mining companies and trade houses adapting their shipping strategies including hiring capesize ships for longer periods, known as time charters.

    “The three new aspects to our shipping strategy are the increasing expansion from iron ore to the broader bulk markets to include met coal and thermal coal cargoes, the move from FOB [free-on-board] to CIF [cost-insurance-and-freight] volumes and the move from point to point to time charters,” said Anglo American’s head of commercial services Heike Truol.

    (SD-Agencies)