The shipping industry-related exchange traded fund is seeing clearer skies as China increases imports of raw goods.
The Guggenheim Global Shipping ETF (NYSEArca: SEA) rose 2.6% Tuesday. Year-to-date, SEA has declined 9.1%.
China is purchasing a record amount of commodities, importing an average 77.72 million tons a month this year, despite slowing economic growth, reports Naomi Christie for Bloomberg.
“We’re seeing an increased push towards Chinese volume being shipped,” Alex Gray, chief executive officer of Clarkson Securities Ltd., said in the article. “That’s what’s driving us upwards at the moment.”
Consequently, cost of shipping freights or daily rates for Capesize vessels hauling about 160,000 metric tons of commodity surged 38% Tuesday, the largest percentage gain since record keeping started in March 1999.
Chinese imports from commodity producing countries, like Australia and Brazil, are on the rise.
“The Brazilians are back in the market in a meaningful way for the first time in a while,” Jonathan Chappell, shipping analyst at Evercore Partners Inc., said in the article. “That’s driving long-haul demand from the Atlantic Basin to the Pacific Basin.”