Wed Mar 28, 2012
By Soma Das
March 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose on Wednesday as the capesize index turned positive after 20 straight sessions.
The main index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 5 points or 0.55 percent to 922 points.
The Baltic's capesize index rose 0.52 percent to 1,361 points, as expectations of demand recovery in top consumer China aided sentiment.
Steel demand in China is facing a seasonal recovery as construction activities resume with the warmer weather.
Shipments of iron ore, a raw material for steel, account for around a third of seaborne volumes on the larger capesizes.
Earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, have fallen more than 83 percent this year.
"Capesize average rates ended their losing streak midweek on ebbing pressure in the Atlantic coupled with marginal rate increase on the Fronthaul trade," RS Platou Markets analyst Rahul Kapoor said.
George Lazaridis of Intermodal Shipbrokers Co expects the recovery in capesize rates to be slow in the near term due to plenty of available tonnage and muted demand from Australia, a major iron ore exporter.
"The Pacific has been taking the hardest hits this week with limited fresh inquiries coming out of Australia," Lazaridis said.
"With the so many vessels now open in the market it will be hard for a reversal of these poor conditions to emerge quickly."
The Baltic's panamax index gained 0.48 percent to 1,040 points, with average daily earnings rising to $8,317, gaining support from fresh demand in the Atlantic basin, despite a piling tonnage list.
"Panamaxes are still able to mark further gains as tonnage lists are still holding tight while there is a steady inflow of fresh inquiries," Lazaridis said.
"The rejuvenated Atlantic basin has been the main cause for this market revival these past weeks and it looks as though it could hold for a while longer," Lazaridis added.
Panamaxes usually transport 60,000 to 70,000 tonne cargoes of coal or grains.
Average daily earnings for handysize vessels was up at $8,570, while that of supramax ships slipped $9 to $11,026.
The overall index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, is down about 47 percent this year.
(Editing by Anthony Barker)
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