Tue Sep 11, 2012
By Koustav Samanta
Sept 11 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, fell on Tuesday due to lower rates across its larger vessel segments.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 4 points or 0.6 percent to 662 points.
The Baltic's panamax index slipped 16 points or 2.75 percent to 566 points, with average daily earnings for panamaxes falling $125 to $4,494.
Average daily earnings have fallen about 66 percent this year and are hovering around lows not seen since January, 2009.
Panamaxes usually transport 60,000 to 70,000 tonne cargoes of coal or grains.
The Baltic's capesize index dipped 1 point to 1,187 points.
Earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, have fallen more than 87 percent this year.
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 spot price of steel ingredient iron ore jumped to more than $100 a tonne on Tuesday for the first time since mid August, on hopes that China's recent plan to invest more than $150 billion in infrastructure projects will revive steel demand.
"Although iron ore prices have rebounded, we argue that a number of domestic iron ore miners still remain in the red. In sum; a slightly more positive tone to underlying fundamentals for dry bulk, but we still see vessel availability as too high - maintaining our cautious stance," Arctic Securities analyst Erik
Nikolai Stavseth said in a note.
The Chinese infrastructure spending focuses on building ports, highways, and airports and could help spur demand for iron ore and other dry bulk imports into the world's second largest economy, Michael Webber, analyst at Wells Fargo said in a note.
"While we view this bump in government spending as a positive, with low iron ore and coal prices likely adding additional support to a positive dry bulk day rate read through, for the most part we view the stimulus as a trading catalyst as opposed to a fundamental game changer," Webber added.
Average daily earnings for handysize ships were up $85 to $6,810, while those for supramax ships were down $72 to $8,580.
Growing ship supply has been outpacing commodity demand for quite sometime now and is widely expected to cap dry bulk freight rate gains in the coming months.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser has fallen about 62 percent this year.
(Reporting by Koustav Samanta in Bangalore; Editing by Anthony Barker)
By Koustav Samanta
Sept 11 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, fell on Tuesday due to lower rates across its larger vessel segments.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 4 points or 0.6 percent to 662 points.
The Baltic's panamax index slipped 16 points or 2.75 percent to 566 points, with average daily earnings for panamaxes falling $125 to $4,494.
Average daily earnings have fallen about 66 percent this year and are hovering around lows not seen since January, 2009.
Panamaxes usually transport 60,000 to 70,000 tonne cargoes of coal or grains.
The Baltic's capesize index dipped 1 point to 1,187 points.
Earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, have fallen more than 87 percent this year.
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 spot price of steel ingredient iron ore jumped to more than $100 a tonne on Tuesday for the first time since mid August, on hopes that China's recent plan to invest more than $150 billion in infrastructure projects will revive steel demand.
"Although iron ore prices have rebounded, we argue that a number of domestic iron ore miners still remain in the red. In sum; a slightly more positive tone to underlying fundamentals for dry bulk, but we still see vessel availability as too high - maintaining our cautious stance," Arctic Securities analyst Erik
Nikolai Stavseth said in a note.
The Chinese infrastructure spending focuses on building ports, highways, and airports and could help spur demand for iron ore and other dry bulk imports into the world's second largest economy, Michael Webber, analyst at Wells Fargo said in a note.
"While we view this bump in government spending as a positive, with low iron ore and coal prices likely adding additional support to a positive dry bulk day rate read through, for the most part we view the stimulus as a trading catalyst as opposed to a fundamental game changer," Webber added.
Average daily earnings for handysize ships were up $85 to $6,810, while those for supramax ships were down $72 to $8,580.
Growing ship supply has been outpacing commodity demand for quite sometime now and is widely expected to cap dry bulk freight rate gains in the coming months.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser has fallen about 62 percent this year.
(Reporting by Koustav Samanta in Bangalore; Editing by Anthony Barker)
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