Thu Sep 6, 2012
By Koustav Samanta
Sept 6 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, fell for the seventh straight session on Thursday as rates for both capesize and panamax vessels continued to weaken.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 9 points or 1.32 percent to 675 points.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, has fallen about 61 percent this year.
The Baltic's panamax index dropped 30 points or 4.64 percent at 617 points.
Earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, have fallen about 63 percent this year.
"After last week's continued bearish sentiment we were hoping for some glimmers of positiveness this week. This is not the case and the (panamax) market in both hemispheres is continuing to drop like a rock," ship broker Fearnleys said in its weekly note.
"We see owners underbidding and waiting up to six days in order to even secure employment for their vessels. Some owners drop anchor waiting for cargoes to come."
The Baltic's capesize index dipped 2 points or 0.17 percent to 1,186 points. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.
Average earnings for capesizes, which have fallen about 87 percent so far this year, were down $31 to $3,466 on Thursday.
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.
Spot iron ore prices hit their weakest in nearly three years, extending a market rout that began in July and which is likely to continue as poor steel demand drove Shanghai steel futures to a record low on Thursday.
Iron ore prices have dropped 36 percent since early July, the hardest hit among industrial commodities by a slowdown in top buyer China whose economy is predicted to grow this year at its weakest pace in a decade.
"Although most market participants still expect 6 percent growth in seaborne iron-ore trade in 2012 (we are modelling 4 percent), a decline in Chinese demand would significantly alter those expectations, likely weighing on H2 sentiment," Michael Webber, analyst at Wells Fargo said in a note on Wednesday.
Average daily earnings for handysize ships were up $44 to $6,667, while those for supramax ships were down $82 to $8,752.
"In the smaller segments we see little to no changes since last week. There are still entering some fresh cargos, but the growing list of available tonnage is outnumbering the cargos, Fearnleys said.
(Reporting by Koustav Samanta in Bangalore; Editing by Alison Birrane)
By Koustav Samanta
Sept 6 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, fell for the seventh straight session on Thursday as rates for both capesize and panamax vessels continued to weaken.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 9 points or 1.32 percent to 675 points.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, has fallen about 61 percent this year.
The Baltic's panamax index dropped 30 points or 4.64 percent at 617 points.
Earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, have fallen about 63 percent this year.
"After last week's continued bearish sentiment we were hoping for some glimmers of positiveness this week. This is not the case and the (panamax) market in both hemispheres is continuing to drop like a rock," ship broker Fearnleys said in its weekly note.
"We see owners underbidding and waiting up to six days in order to even secure employment for their vessels. Some owners drop anchor waiting for cargoes to come."
The Baltic's capesize index dipped 2 points or 0.17 percent to 1,186 points. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.
Average earnings for capesizes, which have fallen about 87 percent so far this year, were down $31 to $3,466 on Thursday.
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.
Spot iron ore prices hit their weakest in nearly three years, extending a market rout that began in July and which is likely to continue as poor steel demand drove Shanghai steel futures to a record low on Thursday.
Iron ore prices have dropped 36 percent since early July, the hardest hit among industrial commodities by a slowdown in top buyer China whose economy is predicted to grow this year at its weakest pace in a decade.
"Although most market participants still expect 6 percent growth in seaborne iron-ore trade in 2012 (we are modelling 4 percent), a decline in Chinese demand would significantly alter those expectations, likely weighing on H2 sentiment," Michael Webber, analyst at Wells Fargo said in a note on Wednesday.
Average daily earnings for handysize ships were up $44 to $6,667, while those for supramax ships were down $82 to $8,752.
"In the smaller segments we see little to no changes since last week. There are still entering some fresh cargos, but the growing list of available tonnage is outnumbering the cargos, Fearnleys said.
(Reporting by Koustav Samanta in Bangalore; Editing by Alison Birrane)
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