Baltic index turns negative for 1st time since late February
The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned negative on Tuesday after holding firm for 28 straight sessions, as falling rates for smaller vessels countered strength in capesizes, Reuters reports. The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, fell 3 points or 0.32 percent to 931 points.
The index, which reflects the daily freight market rates of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen more than 46 percent this year.
"The dry bulk market has weakened significantly in 2012 year-to-date due to the Chinese New Year (holiday), continued robust fleet growth, and a softening in demand growth for imported commodities in China and Europe," Jefferies analyst Douglas Mavrinac said in a note.
The Baltic's capesize index climbed 29 points, with average daily earnings rising to $5,656, highs not seen since March 13, on expectations of higher iron ore demand from top consumer China.
Australian miner Fortescue Metals Group said despite talks of slowdown, China's economy is expanding at a relatively healthy pace, fuelling demand for raw materials such as iron ore and steel for infrastructure development and consumer products.
"We expect steel production to ramp up going into the summer months, a situation we have not seen fully materialise yet, and think this will support the dry bulk market," Arctic Securities analyst Erik Nikolai Stavseth said.
Shipments of iron ore, a raw material for steel, account for around a third of seaborne volumes on the larger capesizes.
China's daily crude steel output rose to 1.919 million tonnes in mid-March from 1.898 million tonnes earlier in the month, industry data showed last week.
"While Chinese iron ore and steel inventories have declined modestly over the past several weeks, and while we believe increased Chinese iron ore fixtures could provide slight support for spot rates, we expect any improvement to be relatively modest," Wells Fargo senior analyst Michael Webber said in a note.
The Baltic's panamax index slipped 0.19 percent. Average daily earnings for panamaxes, which usually transport 60,000-70,000 tonne cargoes of coal or grains, reached $8,381.
Average daily earnings for handysize and supramax ships were down at $8,439 and $10,354 , respectively.
The index, which reflects the daily freight market rates of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen more than 46 percent this year.
"The dry bulk market has weakened significantly in 2012 year-to-date due to the Chinese New Year (holiday), continued robust fleet growth, and a softening in demand growth for imported commodities in China and Europe," Jefferies analyst Douglas Mavrinac said in a note.
The Baltic's capesize index climbed 29 points, with average daily earnings rising to $5,656, highs not seen since March 13, on expectations of higher iron ore demand from top consumer China.
Australian miner Fortescue Metals Group said despite talks of slowdown, China's economy is expanding at a relatively healthy pace, fuelling demand for raw materials such as iron ore and steel for infrastructure development and consumer products.
"We expect steel production to ramp up going into the summer months, a situation we have not seen fully materialise yet, and think this will support the dry bulk market," Arctic Securities analyst Erik Nikolai Stavseth said.
Shipments of iron ore, a raw material for steel, account for around a third of seaborne volumes on the larger capesizes.
China's daily crude steel output rose to 1.919 million tonnes in mid-March from 1.898 million tonnes earlier in the month, industry data showed last week.
"While Chinese iron ore and steel inventories have declined modestly over the past several weeks, and while we believe increased Chinese iron ore fixtures could provide slight support for spot rates, we expect any improvement to be relatively modest," Wells Fargo senior analyst Michael Webber said in a note.
The Baltic's panamax index slipped 0.19 percent. Average daily earnings for panamaxes, which usually transport 60,000-70,000 tonne cargoes of coal or grains, reached $8,381.
Average daily earnings for handysize and supramax ships were down at $8,439 and $10,354 , respectively.