Friday, 2 November 2012

Baltic index drops as capesize rates weaken further

Thu Nov 1, 2012
Nov 1 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Thursday as capesize rates weakened for the third straight day.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 2.53 percent to 1,000 points.

The Baltic's capesize index fell 2.65 percent to 2,355 points.

Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were down over 4 percent to $15,812.

Though iron ore rates rose Thursday, they did not help capesize demand as traders said smaller Chinese steel producers were opting to buy iron ore from stockpiles at ports rather than fresh seaborne cargoes.

"Brokers noted close to no activity in the capesize segment yesterday, a worrying sign given that capesize has been the main strength in the dry bulk market the last few weeks due to iron ore stockbuilding," RS Platou Markets said in a note.

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 1.53 percent to 770 points, with average daily earnings down $88 at $6,164.

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

Average daily earnings for handysize ships were down $47 at$6,274, while those of supramax ships were down $70 at $7,015.

(Reporting by Shruti Chaturvedi in Bangalore, editing by William Hardy)

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