Baltic index down further on softer vessel rates

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Thursday for an eighteenth straight session as softer demand weighed on vessel rates. The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, lost 17 points or 1.94 percent to 861 points. The capesize index was down 0.25 percent at 1,178 points. Average daily earnings for capesizes, which usually transport 150,000-tonne cargoes such as iron ore and coal, were down $103 at $4,255. A big drop in activity in the Pacific basin led to further losses being noted on freight levels for capesize vessels, Greek broker Intermodal said in its weekly report. "It seems as though demand overall in the Far East is now considerably softer and might remain this way as long as stockpiles in China remain relatively high," Intermodal said. Chinese steel futures extended losses on Thursday to near a record low as a slowing economy in the world's top steel producer and consumer crimped demand, with traders expecting even lower prices in the next few weeks. Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight. The Baltic Exchange's panamax index fell 2.41 percent to 931 points, with average daily earnings for panamaxes, which typically transport 60,000-70,000 tonne cargoes of coal or grains, down $189 at $7,423. The segment which ships about 50-60 percent of coal cargoes has also been suffering from lack of enquiries, analysts said. "The Atlantic suffered the worst, as demand (for grain cargoes) from East Coast of South America started to drain up," Intermodal said. The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen more than 50 percent this year.