Fri Apr 20, 2012
April 20 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for the eighth day on Friday, as a surge in Atlantic and Pacific fixture activity pushed up panamax vessel rates.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 33 points or 3.79 percent to 1,067 points.
"Spot activity is largely centered on panamax vessels with earnings up close to 30 percent week-on-week in both the Atlantic and the Pacific basin," RS Platou Markets analyst Frode Morkedal said.
The Baltic's panamax index rose 9.82 percent, with average daily earnings up at $11,882, highs not seen since early January.
Average daily earnings for handysize and supramax ships were up at $8,482 and $10,667, respectively.
The Baltic's capesize index fell 0.07 percent to 1,533 points due to fading iron ore demand in top consumer China.
"Chinese traders have taken a "wait-and-see" approach on iron ore as prices have shot up and look to be on a declining path on fears that Chinese economy will continue to slow over the coming months," Arctic Securities analyst Erik Nikolai Stavseth said.
Iron ore prices remained steady near its six-month high level while steel futures posted their worst week in two months, as slow Chinese demand kept the pressure on prices and restrained buyers' appetite for raw material iron ore.
Stavseth said, however, an upswing in steel prices could likely lift iron ore buying interest.
"We see strength in steel prices as key for interest in iron ore," he said.
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.
Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, were down about 76 percent this year.
Growing ship supply has been outpacing commodity demand for sometime now and is expected to cap dry bulk freight rate gains 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 about 39 percent this year.
(Reporting by Soma Das in Bangalore; Editing by Alison Birrane)
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