Reuters reported that the Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Monday, as sluggish activity continued to pull down panamax and capesize vessel rates.

The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 10 points or 1.29% to 764 points.

RS Platou Markets analyst Rahul Kapoor said in a note to clients that "Abysmally weak demand coupled with low cargo enquires and oversupplied tonnage is seeing all dry bulk segments reeling under tremendous pressure.”

The Baltic's panamax index dipped 10 points or 1.23% to 804 points.

Earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, have fallen more than 51% this year.

The Baltic's capesize index slipped 11 points or 0.94% to 1,158 points. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.

Mr Kapoor said that "Iron ore majors continued to fix spot in the Capesize segment but had plenty of ships to choose from and rates only drifted lower.”

Sellers of foreign iron ore cargoes to China slashed prices further on Monday as the benchmark rate dropped to its lowest in more than 2-1/2 years, with losses likely to deepen as weak steel demand forces mills to cut output.

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.

Source - Reuters

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