Reuters reported that the Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on August 2nd 2012 for an eighteenth straight session as softer demand weighed on vessel rates.

The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, lost 17 points or 1.94% to 861 points. The capsize index was down 0.25% at 1,178 points.

Greek broker Intermodal said in its weekly report that average daily earnings for capsizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were down USD 103 at USD 4,255. A big drop in activity in the Pacific basin led to further losses being noted on freight levels for capsizes vessels.

Intermodal said that "It seems as though demand overall in the Far East is now considerably softer and might remain this way as long as stockpiles in China remain relatively high."

Chinese steel futures extended losses on Thursday to near a record low as a slowing economy in the world's top steel producer and consumer crimped demand, with traders expecting even lower prices in the next few weeks.

Iron ore shipments account for around a third of seaborne volumes on the larger capsizes, and brokers said price developments remained a key factor for dry freight.

The Baltic Exchange's Panamax index fell 2.41% to 931 points, with average daily earnings for panamaxes, which typically transport 60,000 to 70,000 tonne cargoes of coal or grains, down USD 189 at USD 7,423.

Analysts said that the segment which ships about 50% to 60% of coal cargoes has also been suffering from lack of enquiries.

Intermodal said that "The Atlantic suffered the worst, as demand for grain cargoes from East Coast of South America started to drain up."

The main index, which factors in the average daily earnings of capsize, Panamax, Supramax and Handysize dry bulk transport vessels, has fallen more than 50% in 2012.

Source - Reuters

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