Mon Jun 25, 2012
June 25 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, was flat for second straight day on Monday as vessel activity remained low.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, stood at 978 points.
The capesize index rose 5 points or 0.43 percent to 1,160 points.
Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were up $21 at $3,591.
Spot iron ore prices may struggle to stretch gains this week, as supply outpaces demand with China's steel market staying sluggish, raising the risk for traders hoping to resume a recent 10-day rally.
"While steel prices have remained sluggish, reports indicate that Chinese traders are betting that high steel output will force steel mills into the spot market to restock," RS Platou Markets analysts said in a note.
"However, if steel prices continue to weaken, sentiment could turn again and force steel mills to curb output."
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 2.1 percent to 1,026 points, with average daily earnings for panamaxes, which typically transport 60,000-70,000 tonne cargoes of coal or grains, down $173 to $8,172.
Panamax spot rates have been falling on a drop in seasonal South American grain fixtures coupled with oversupply of vessels.
(Reporting by NR Sethuraman in Bangalore; Editing by Anthony Barker)
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