Commodities: Hiring of iron-ore carriers rose 51 per cent in September

Commodity markets were relatively well behaved on the first day of the week, as investors continued to track events in Washington D.C.

Significantly, the US government is discussing a plan that would end the shutdown and increase the debt ceiling by enough to cover the nation’s borrowing needs at least through mid-February 2014, sources told Reuters.

The agreement would also see the government re-open until January and include a mechanism to force lawmakers into longer-term budget discussions, the Financial Times reported.

Oil futures finished the day down by 0.13% at $102.28 on the NYMEX despite those signs of progress.

Some observers were also referencing an estimate from Goldman Sachs – from last Friday – according to whom the current impasse in Washington, so far, may reduce US economic growth in the fourth quarter by half a percentage point to 2%.

Freight traders are hiring record numbers of iron-ore carriers in the spot market as Chinese steel production expands at the fastest pace in three years, spurring the biggest rally in shipping rates since 2009.

One-time charters to haul iron-ore on Capesizes, the largest ore carriers, rose 51% to 124 in September from the previous month, according to data compiled by Morgan Stanley, Bloomberg says. More than 90% are bound for China.

Chinese steel production is expanding at its fastest in three years.

China’s Dalian Commodity Exchange will begin trading its first iron-ore futures for physical delivery this week, challenging derivatives from CME Group and Singapore’s exchange.

Gold futures ended the day only slightly lower, by 0.92% to the $1,264.90/ounce mark.

Corn futures rose by 0.23% to the $438/bushel level.

AB