Monday 24 September 2012

Baltic index rebounds further as capesize freight rates jump

Fri Sep 21, 2012
Sept 21 (Reuters) - The Baltic Exchange's main sea freight index, which has tumbled 55 percent this year and fallen steadily since July, continued this week's rebound on Friday thanks to busier activity in the capesize segment.

The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 19 points or 2.52 percent to 774 points.

Capesize rates have jumped this week on brisker iron ore trading between Australia and China, according to analysts, which has pushed the broader index up as well.

The capesize index has climbed by more than 31 percent this week, helping lift the main index about 17 percent.

On Friday, the Baltic's capesize index was up 53 points to 1,584 points, with average daily rates for capesizes up $691 at $7,664, highs not seen in more than two months.

Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal, with iron ore shipments accounting for around a third of seaborne volumes on the larger capesizes.

Rates will continue to increase if China increase its imports from Brazil in the next three months, the analysts said.

"Average rates may continue their recovery if China increases Brazilian share of imports during the last 3 months of the year as seen in 2011," RS Platou Markets analyst Herman Hildan said.

The Baltic's panamax index lost 0.21 percent, with average daily earnings down $5 at $3,719.

Average daily earnings for handysize were up at $7,047, while supramax rates fell to $8,859.

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.

The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen more than 55 percent this year.

(Reporting by Soma Das in Bangalore; Editing by Hugh Lawson)

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