The Baltic Exchange's main sea freight index , which tracks rates to ship dry commodities, dropped yet again on Thursday as ship oversupply in both the basins negated a pick up in fixing activity, Reuters reports.The index -- which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser -- fell 3 points, or 0.23 percent, to 1,325 points. The index has traded this year between 1,300 and 1,500 points as ship oversupply outpaces demand to ship commodities.
Thursday's fall makes it the tenth straight negative session for the overall index.
"There has been a fair amount of fixing activity, but clearly that has not been enough to hold rates up," said Peter Norfolk, research director at freight broker FIS.
"There's been plenty of ballasting ships for the Capesize, which have been ballasting towards South America. There's plenty of spot ships in the Pacific."
The Baltic's capesize index fell 0.8 percent, with average earnings down at $10,908. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
Sentiment for capesizes is being hurt by expectations that iron ore imports into Europe will fall as a result of sluggishness in Europe's economy as it deals with sovereign debt issues.
"Due to slowing demand for imported iron ore into the EU and coking coal into India and China, global dry bulk shipping demand growth for 2011 is now expected to total approximately 3-4 percent, versus our estimate only one quarter ago of 5-6 percent," Jefferies & Co analyst Douglas Mavrinac said.
On Thursday, the Baltic's panamax index edged down 0.13 percent, with average daily earnings slightly lower at $12,252.
"Looking at the cargo distribution, Indonesian coal remains the main driver but we see also an increased cargo volume out of Australia," broker ICAP said.
CHINA WORRIES
China's factory sector shrank for the first time in a year in July, a survey showed on Thursday, feeding worries among the country's main trading partners that its growth is unsustainable and could lead to a slump.
"Thermal coal import growth into Asia is now only expected to be 2 percent in 2011 versus 6 percent previously as the Chinese are now expected to use more domestically mined coal than previous projections," Jefferies' Mavrinac said.
Norfolk at FIS said that though there were concerns about the Chinese economy, the steel sector at the moment is looking fairly positive for the second half.
"At the moment, iron ore demand is pretty healthy. We were expecting (in the summer) a bit of slowdown in China steel production, but so far we have not seen that at all, which is a positive," he said.
China, which makes nearly half the world's crude steel, is expected to produce at least 700 million tonnes this year as mills cash in on rising prices .IO62-CNI=SI, with apparent consumption up nearly 9 percent so far in the first six months.
But analysts said it was difficult to say if the dry freight market has bottomed, given that the growth in iron ore imports into Japan following the earthquake and tsunami have been slower than anticipated.
Thursday's fall makes it the tenth straight negative session for the overall index.
"There has been a fair amount of fixing activity, but clearly that has not been enough to hold rates up," said Peter Norfolk, research director at freight broker FIS.
"There's been plenty of ballasting ships for the Capesize, which have been ballasting towards South America. There's plenty of spot ships in the Pacific."
The Baltic's capesize index fell 0.8 percent, with average earnings down at $10,908. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
Sentiment for capesizes is being hurt by expectations that iron ore imports into Europe will fall as a result of sluggishness in Europe's economy as it deals with sovereign debt issues.
"Due to slowing demand for imported iron ore into the EU and coking coal into India and China, global dry bulk shipping demand growth for 2011 is now expected to total approximately 3-4 percent, versus our estimate only one quarter ago of 5-6 percent," Jefferies & Co analyst Douglas Mavrinac said.
On Thursday, the Baltic's panamax index edged down 0.13 percent, with average daily earnings slightly lower at $12,252.
"Looking at the cargo distribution, Indonesian coal remains the main driver but we see also an increased cargo volume out of Australia," broker ICAP said.
CHINA WORRIES
China's factory sector shrank for the first time in a year in July, a survey showed on Thursday, feeding worries among the country's main trading partners that its growth is unsustainable and could lead to a slump.
"Thermal coal import growth into Asia is now only expected to be 2 percent in 2011 versus 6 percent previously as the Chinese are now expected to use more domestically mined coal than previous projections," Jefferies' Mavrinac said.
Norfolk at FIS said that though there were concerns about the Chinese economy, the steel sector at the moment is looking fairly positive for the second half.
"At the moment, iron ore demand is pretty healthy. We were expecting (in the summer) a bit of slowdown in China steel production, but so far we have not seen that at all, which is a positive," he said.
China, which makes nearly half the world's crude steel, is expected to produce at least 700 million tonnes this year as mills cash in on rising prices .IO62-CNI=SI, with apparent consumption up nearly 9 percent so far in the first six months.
But analysts said it was difficult to say if the dry freight market has bottomed, given that the growth in iron ore imports into Japan following the earthquake and tsunami have been slower than anticipated.