Baltic index flat as activity slows

Fri Jun 22, 2012
By Nallur Sethuraman
June 22 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, was unchanged on Friday due to a slowdown in vessel activity.

The overall index, which reflects the daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, remained at 978 points. The index rose 4 percent this week.

"We saw a temporary increase in cargoes but things are starting to slow down again," said George Lazaridis, head of research with Greek shipbroker Intermodal.

Baltic's capesize index rose 3 points or 0.26 percent to 1,155 points.

Capesizes were up due to slight activity but iron ore prices have to drop considerably for the trader to stockpile again, Lazaridis said.

Chinese stockpiles are already high, he said.

Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were up $20 at $3,570.

Physical trading in the spot iron ore market was limited on Friday with a public holiday in top importer China, a day after the benchmark price rose for a 10th straight session in its longest upward streak in seven months.

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's panamax index fell 2.33 percent to 1,048 points, with average daily earnings for panamaxes, which typically transport 60,000-70,000 tonne cargoes of coal or grains, down $198 at $8,345.

Demand for panamaxes generally soften during the summer period, Lazaridis said.

"Grain cargoes are going to decrease. The Pacific is not showing the typical strength it had a year back."

(Reporting by NR Sethuraman in Bangalore; editing by James Jukwey)