Baltic sea index rises on higher panamax rates

By Koustav Samanta
    April 16 (Reuters) - The Baltic Exchange's main sea freight
index, which tracks rates for ships carrying dry
commodities, rose on Monday, as an increase in coal shipments
pushed up rates for panamax vessels.
    The overall index, which gauges the cost of shipping
commodities such as iron ore, cement, grain, coal and
fertilizer, rose 3 points or 0.31 percent to 975 points.
    "Although dry bulk shipping demand is expected to remain
firm for the foreseeable future, we also believe the dry bulk
shipping market is likely to remain challenging over the next 12
months given the significant number of new projected dry bulk
carrier shipyard deliveries," Jefferies analyst Douglas Mavrinac
said.
    The main index, which factors in the average daily earnings
of capesize, panamax, supramax and handysize dry bulk transport
vessels, has fallen about 44 percent this year.
    The Baltic's panamax index rose 2.68 percent, with
average daily earnings up at $9,506.
    "The Panamax segment is benefitting from the South American
grain season and fixture activity is being well supported by
coal demand ahead of the peak summer season," RS Platou Markets
analyst Frode Morkedal said in a note to clients.  
    However, earnings for panamaxes, which usually transport
60,000 to 70,000 tonne cargoes of coal or grains, have dropped
about 28 percent this year.
    Average daily earnings for handysize and supramax ships were
up at $8,235 and $9,875, respectively.    
    The Baltic's capesize index fell 1.59 percent to
1,547 points, primarily due to stalling fixture activity.
    "The recent capesize market recovery, which was primarily
driven by Brazilian exports into Asia, should in our view resume
its upward trend in coming weeks on an expected increase in
Chinese restocking as steel outlook improves going into 2H12,"
Morkedal said.
    Average daily earnings for capesizes, which typically
transport 150,000 tonne cargoes such as iron ore and coal, were
down at $6,741, a drop of about 76 percent this year.
    Slower growth could dent steel demand in top consumer China
and limit its appetite for imported iron ore, with prospective
ore buyers thinning as spot prices inched up to six-month highs.
 
    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.  

 (Reporting by Koustav Samanta in Bangalore; Editing by Helen
Massy-Beresford)