The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for an 11th straight session last Friday as a firm panamax market could not make up for weakness in the capesizes, Reuters reports. The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, fell two points, or 0.15 per cent, to 1,323 points. The index has traded this year between 1,300 and 1,500 points as ship oversupply outpaces demand to ship commodities.
'We expect the dry bulk orderbook to continue to drive material supply headwinds through 2012 and 2013 at a minimum,' Wells Fargo Securities analyst Michael Webber said.
'Utilisation will remain under pressure going forward, likely moving towards, or potentially below 80 per cent, keeping day rates below breakeven levels and likely absorbing any material bump in demand.'
The Baltic's Capesize index fell 0.54 per cent, with average earnings down at US$10,806. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
'We've not seen massive moves in capesize rates, but the general trend is still softer. It's not really for the want of chartering activity . . . there's been plenty of chartering activity. It's just to highlight there is too much tonnage at the moment,' said Peter Norfolk, research director at freight broker FIS. He noted recent cargo fixtures by major miners Rio Tinto and BHP Billiton.
Coal fixtures out of Indonesia and into India, meanwhile, helped push up rates for panamaxes. Last Friday, the Baltic's Panamax index rose 0.07 per cent, with average daily earnings at US$12,256.
'Rates for panamaxes have steadied . . . there have been some coal fixtures out of Indonesia, which will help to tighten things up in the Pacific. Perhaps Indian coal demand is also helping,' Mr Norfolk said.
In spite of higher activity in the panamax sector, the overall market is still likely to remain weak as the growth in trade of major bulk shipments is expected to slow to 3.5 per cent this year from 12 per cent last year, Wells Fargo said in a note.
Trade in minor bulk goods is expected to increase by about 5 per cent, led by 6 per cent growth in movement of cement, forest products and steel products.
'Given the number of newbuildings that have joined the fleet and expected deliveries over the next two years, we expect heightened charterer discrimination against older vessels and a consequential acceleration in the decline in values,' DryShips Inc chief executive George Economou said last Thursday.
'We expect the dry bulk orderbook to continue to drive material supply headwinds through 2012 and 2013 at a minimum,' Wells Fargo Securities analyst Michael Webber said.
'Utilisation will remain under pressure going forward, likely moving towards, or potentially below 80 per cent, keeping day rates below breakeven levels and likely absorbing any material bump in demand.'
The Baltic's Capesize index fell 0.54 per cent, with average earnings down at US$10,806. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
'We've not seen massive moves in capesize rates, but the general trend is still softer. It's not really for the want of chartering activity . . . there's been plenty of chartering activity. It's just to highlight there is too much tonnage at the moment,' said Peter Norfolk, research director at freight broker FIS. He noted recent cargo fixtures by major miners Rio Tinto and BHP Billiton.
Coal fixtures out of Indonesia and into India, meanwhile, helped push up rates for panamaxes. Last Friday, the Baltic's Panamax index rose 0.07 per cent, with average daily earnings at US$12,256.
'Rates for panamaxes have steadied . . . there have been some coal fixtures out of Indonesia, which will help to tighten things up in the Pacific. Perhaps Indian coal demand is also helping,' Mr Norfolk said.
In spite of higher activity in the panamax sector, the overall market is still likely to remain weak as the growth in trade of major bulk shipments is expected to slow to 3.5 per cent this year from 12 per cent last year, Wells Fargo said in a note.
Trade in minor bulk goods is expected to increase by about 5 per cent, led by 6 per cent growth in movement of cement, forest products and steel products.
'Given the number of newbuildings that have joined the fleet and expected deliveries over the next two years, we expect heightened charterer discrimination against older vessels and a consequential acceleration in the decline in values,' DryShips Inc chief executive George Economou said last Thursday.