Softer Capesize Demand Drags Down Baltic Index
The Baltic Exchange's main sea freight index fell for an eleventh straight session on Tuesday to nearly one-month lows, pushed down by lower rates for capesize vessels due to sluggish demand in both Atlantic and Pacific regions.
The Baltic index, which tracks rates for ships ferrying dry bulk commodities, fell 40 points, or 2.3%, to 1,734 points, lowest since July 8. The index has, still, nearly tripled since February, mainly driven by strong demand for vessels that ship iron ore from Brazil into China over the past few months. Activity, however, eased in the past couple of weeks, weighing on vessel rates, analysts said.
The capesize index fell 178 points, or 5.1%, to 3,302 points. Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, fell $994 to $24,625.
Dalian and Singapore iron ore futures extended their losses on Tuesday, while spot prices slipped into bear market territory, on downbeat demand outlook for the steelmaking ingredient in China and signs that the global supply crunch is easing. "All main routes are now on a downward trend with the overall market showing a rather sluggish mood for the time being," Allied shipping said in a research note.
The panamax index gained 6 points, or 0.3%, to 1,759 points. The index snapped a nine-day losing streak. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, rose $43 to $14,068.
The supramax index fell 3 points to 956 points.
Reporting by Nallur Sethuraman