Weak Iron-Ore Demand Weighs on Baltic Index
The Baltic Exchange's main sea freight index fell for a seventh straight session on Wednesday, as demand for shipping iron-ore fell in the Atlantic.
The Baltic index, which tracks rates for ships ferrying dry bulk commodities, fell 1.6%, or 31 points, to 1,868 points. The index has still more than tripled since February, mainly driven by strong demand for vessels that ship iron ore from Brazil into China.
"A step back was witnessed during this past week in freight levels, as activity seems to have slowed down on the key Brazil – China route," Allied Shipbroking said in a note. "In the Pacific, demand also plummeted these past few days, with less interest being seen amongst charters to fixing any stems."
The capesize index fell 7 points, or 0.2%, to 3,657 points. Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, fell $235 to $26,952.
The panamax index fell 78 points, or nearly 4%, to 1,891 points. The index was down for the sixth straight session. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, decreased $623 to $15,129.
"With the transatlantic route losing steam, the whole freight market for this segment softened this past week. Adding to this bearish environment, limited fresh enquiries were to be seen in South America, a region that had previously supported rates," Allied said.
The supramax index fell 6 points to 982 points.
Reporting by Nallur Sethuraman