Commodity Carrier Returns Slump as Grain Exports Slow

By Rob Sheridan - May 10, 2012
Bloomberg
Returns for Panamax ships that carry grains and coal slumped as exports of the commodities slowed, curbing demand for vessels.

Daily average earnings fell 2.9 percent to $10,774, according to the London-based Baltic Exchange today. That’s the eighth decline in a row and the lowest in three weeks, the data show. Panamaxes are the second-largest vessels tracked by the Baltic Dry Index, a broader gauge of costs to ship commodities, which fell for a second day.

A slowdown in grain exports from South America has in part contributed to the slide in rates for Panamax vessels, Oslo- based investment bank Fearnley Fonds ASA said today in an e- mailed report. The carrying capacity of the global Panamax fleet reached 162.8 million deadweight tons this month, the most since at least 1970, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.

“In the Pacific the tonnage availability is high combined with limited coal spot sales,” Fearnley Fonds said in the report.

The Baltic Dry Index lost 0.9 percent to 1,146, the exchange’s data showed. Returns for Capesizes, about twice the size of Panamaxes and the largest ships in the gauge, decreased for the first session in six, declining 1 percent to $8,769 a day.

Supramaxes, about 25 percent smaller than Panamaxes, gained 0.1 percent to $11,671. Handysizes, the smallest vessels tracked by the gauge, added 0.5 percent to $9,181, exchange data showed.