Tuesday 30 October 2012

Baltic index down on slow capesize activity

Mon Oct 29, 2012
Oct 29 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell slightly on Monday on a weak activity in the capesize segment.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell slightly by 1 point to 1,048 points.

The Baltic's capesize index rose 0.37 percent to 2,460 points.

Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were slightly up $92 at $16,934.

"Chinese iron ore prices have continued to rise over the past weeks... but the lack of end-user demand for steel is in our view likely to keep iron ore under pressure, effectively capping interest for additional iron ore," Arctic Securities analyst Erik Nikolai Stavseth said in a note.

Spot iron ore prices may ease this week after gaining nearly 4 percent last week as buyers from top consumer China exercise caution after filling up short-term needs, although a gradual pickup in steel demand should keep losses in check.

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 panamax index fell 0.62 percent, with average daily earnings down $38 at $6,386.

Panamaxes typically transport 60,000-70,000 tonne cargoes of coal or grain.

The panamax market has been under pressure from low coal volumes and ample supply of ships, analysts said.

Average daily earnings for handysize ships were down $36 at$6,361, while those of supramax ships were down $54 at $7,250.

(Reporting by NR Sethuraman in Bangalore, editing by William Hardy)

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