Increased Atlantic activity drives up Baltic index
The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose on Friday as panamax vessels benefited from increased Atlantic activity. The main index, which gauges the cost of shipping commodities including iron ore, coal and grain, gained 5 points or 0.57 percent to 877 points, after 11 straight days of declines, Reuters reports.
The Baltic's panamax index rose 3.63 percent to 914 points, with average daily earnings for panamaxes, which typically transport 60,000-70,000 tonne cargoes of coal or grains, gaining $248 to $7,266.
Looking ahead, some analysts expected the market to benefit from an increase in demand in the wake of this week's interest rate cut in China.
"The recent cut in interest rates in China is likely to provide a positive, and sorely needed, tailwind for a dry bulk market struggling under overcapacity," Erik Nikolai Stavseth, an analyst at Arctic Securities said.
Analyst Herman Hildan of RS Platou Markets said he expected the Chinese rate cut to have no major positive impact on dry bulk demand in the near term as end-user demand stays depressed and tonnage oversupplied.
The Baltic Exchange's main index has fallen about 3 percent over the week. It has dipped about 50 percent this year.
Baltic's capesize index dropped 9 points or 0.73 percent to 1,223 points.
Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, dropped to $4,255, its lowest level since 2008 December.
Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
The average daily earnings for handysize ships rose to $8,943, while that of supramax ships fell to $10,453.
Growing ship supply, which is outpacing commodity demand, is seen capping dry bulk freight rate gains in the coming months, with economic uncertainty and a slowdown in China adding to headwinds.