Wed Aug 29, 2012
By Koustav Samanta
Aug 29 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Wednesday on lower rates for capesize and panamax vessels.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 6 points or 0.83 percent to 718 points.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, has fallen about 59 percent this year.
"Overall the sentiment is still bad across all sectors. Despite record scrappings, the order books remains very large and most of the world remains either in recession or on the cusp," Andy Jamison, shipping blogger and owner of the Virtual Shipbroker said.
"The entire industry should also be worried about the move away from coal as a energy source - toward gas and natural solutions. This will no doubt continue to have huge consequences on dry bulk vessel demand into the mid and distant futures."
The Baltic's capesize index dipped 5 points or 0.42 percent to 1,177 points. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.
Average earnings for capesizes, which have fallen about 88 percent so far this year, was up $21 to $3,296 on Wednesday.
"Brokers explained the increase in rates on tighter vessel supply as bad weather and typhoons led to delays, forcing the miners to pay up for prompt tonnage," RS Platou Markets analyst Frode Morkedal said in a note.
China steel futures hit a record low on Wednesday before paring losses at the close, dogged by weakening demand in the world's top consumer that has pushed down the price of raw material iron ore to levels last seen in 2009.
Shipments of iron ore account for about 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 was down 24 points or 2.96 percent at 788 points.
Earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, have fallen more than 52 percent this year.
The panamax market remained slow with little activity in the Atlantic on still slower coal and grain trades, analyst Morkedal said.
Average daily earnings for handysize ships were down $66 to $6,766, while those for supramax ships were up $6 to $8,966.
Growing ship supply has been outpacing commodity demand for some time and is widely expected to weigh on dry bulk freight rates in the coming months.
(Additional reporting by Nallur Sethuraman in Bangalore, editing by William Hardy)
By Koustav Samanta
Aug 29 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Wednesday on lower rates for capesize and panamax vessels.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 6 points or 0.83 percent to 718 points.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, has fallen about 59 percent this year.
"Overall the sentiment is still bad across all sectors. Despite record scrappings, the order books remains very large and most of the world remains either in recession or on the cusp," Andy Jamison, shipping blogger and owner of the Virtual Shipbroker said.
"The entire industry should also be worried about the move away from coal as a energy source - toward gas and natural solutions. This will no doubt continue to have huge consequences on dry bulk vessel demand into the mid and distant futures."
The Baltic's capesize index dipped 5 points or 0.42 percent to 1,177 points. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.
Average earnings for capesizes, which have fallen about 88 percent so far this year, was up $21 to $3,296 on Wednesday.
"Brokers explained the increase in rates on tighter vessel supply as bad weather and typhoons led to delays, forcing the miners to pay up for prompt tonnage," RS Platou Markets analyst Frode Morkedal said in a note.
China steel futures hit a record low on Wednesday before paring losses at the close, dogged by weakening demand in the world's top consumer that has pushed down the price of raw material iron ore to levels last seen in 2009.
Shipments of iron ore account for about 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 was down 24 points or 2.96 percent at 788 points.
Earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, have fallen more than 52 percent this year.
The panamax market remained slow with little activity in the Atlantic on still slower coal and grain trades, analyst Morkedal said.
Average daily earnings for handysize ships were down $66 to $6,766, while those for supramax ships were up $6 to $8,966.
Growing ship supply has been outpacing commodity demand for some time and is widely expected to weigh on dry bulk freight rates in the coming months.
(Additional reporting by Nallur Sethuraman in Bangalore, editing by William Hardy)
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