The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a second day on Tuesday in slower activity with the market still assessing Japan's earthquake, Reuters reports.
The index fell by 0.71 per cent or 11 points to 1,548 points. Prior to the move lower it had risen for 11 consecutive sessions.
Japan faced a potential catastrophe after a quake- crippled nuclear power plant exploded and sent low levels of radiation floating toward Tokyo, prompting some people to flee the capital and others to stock up on essential supplies.
'Overall, it's mostly a wait and see attitude in the market (due to the Japan quake),' said Sverre Svenning, director of research at broker Fearnleys.
'The grains shipment season from South America is putting a floor to panamax and supramax rates which is why they are performing better than capesizes.'
Japan is a major importer of dry bulk commodities including iron ore and coal. Several ports, handling as much as 7 per cent of the country's industrial output, have sustained major damage from the quake, disrupting global supply chains and causing billions of dollars in losses.
'While the Japanese earthquake will likely have a longer term positive effect on the dry bulk market, the short-term effect will likely be negative as ports remain closed,' said Arctic Securities analyst Erik Nikolai Stavseth.
Dry bulk rates are likely to rise as Japanese power plants restock coal inventories and steel companies import more iron ore to rebuild damaged output, ship brokers and analysts said.
'In the longer term, reconstruction should boost demand for steel with potential for significant increases in raw material imports,' said Peter Norfolk, research director at freight broker FIS.
The Baltic's capesize index fell 2.9 per cent on Tuesday, with average daily earnings dropping to US$10,386 in a second session of modest falls. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
Before the rally in late February, the Baltic's main index - which tracks the cost of shipping key commodities such as iron ore, cement, grain, coal, and fertiliser - had fallen for four previous sessions, and in February, it reached its lowest in two years.
The Baltic's panamax index fell 0.47 per cent, with average daily earnings inching lower to US$16,994. Panamax vessels usually transport 60,000-70,000 tonne cargoes of coal or grains. The Baltic's supramax index rose 0.39 per cent.
Brokers said a pick-up in grain cargo activity due to South America's export season was still supporting panamaxes.
While there are indications of some vessel cancellations and delays, analysts expect deliveries to gather pace between 2011 and 2012.
'We believe the dry bulk shipping market is likely to remain challenging for the foreseeable future, given the significant number of new shipyard deliveries,' Jefferies said.
The index fell by 0.71 per cent or 11 points to 1,548 points. Prior to the move lower it had risen for 11 consecutive sessions.
Japan faced a potential catastrophe after a quake- crippled nuclear power plant exploded and sent low levels of radiation floating toward Tokyo, prompting some people to flee the capital and others to stock up on essential supplies.
'Overall, it's mostly a wait and see attitude in the market (due to the Japan quake),' said Sverre Svenning, director of research at broker Fearnleys.
'The grains shipment season from South America is putting a floor to panamax and supramax rates which is why they are performing better than capesizes.'
Japan is a major importer of dry bulk commodities including iron ore and coal. Several ports, handling as much as 7 per cent of the country's industrial output, have sustained major damage from the quake, disrupting global supply chains and causing billions of dollars in losses.
'While the Japanese earthquake will likely have a longer term positive effect on the dry bulk market, the short-term effect will likely be negative as ports remain closed,' said Arctic Securities analyst Erik Nikolai Stavseth.
Dry bulk rates are likely to rise as Japanese power plants restock coal inventories and steel companies import more iron ore to rebuild damaged output, ship brokers and analysts said.
'In the longer term, reconstruction should boost demand for steel with potential for significant increases in raw material imports,' said Peter Norfolk, research director at freight broker FIS.
The Baltic's capesize index fell 2.9 per cent on Tuesday, with average daily earnings dropping to US$10,386 in a second session of modest falls. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
Before the rally in late February, the Baltic's main index - which tracks the cost of shipping key commodities such as iron ore, cement, grain, coal, and fertiliser - had fallen for four previous sessions, and in February, it reached its lowest in two years.
The Baltic's panamax index fell 0.47 per cent, with average daily earnings inching lower to US$16,994. Panamax vessels usually transport 60,000-70,000 tonne cargoes of coal or grains. The Baltic's supramax index rose 0.39 per cent.
Brokers said a pick-up in grain cargo activity due to South America's export season was still supporting panamaxes.
While there are indications of some vessel cancellations and delays, analysts expect deliveries to gather pace between 2011 and 2012.
'We believe the dry bulk shipping market is likely to remain challenging for the foreseeable future, given the significant number of new shipyard deliveries,' Jefferies said.