Baltic sea index falls further on lower vessel rates
The Baltic Exchange's main sea freight index tracking rates for ships carrying dry commodities fell on Wednesday on sluggish activity and lower rates across vessel segments, Reuters reports.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 22 points or 2.93 percent to 728 points, lows not seen since late February.
The Baltic's capesize index dipped 27 points or 2.35 percent to 1,120 points.
Earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, have fallen 89 percent this year.
"Capesize rates have collapsed post a small uptick in mid-July and continued to edge downwards. Ample tonnage supply and weak demand continues to weigh on spot rates," RS Platou Markets analyst Herman Hildan said in a note.
The Baltic's panamax index slipped 2 points to 801 points, with average daily earnings for panamaxes falling $17 to $6,378 on Wednesday. Panamaxes usually transport 60,000 to 70,000 tonne cargoes of coal or grains.
Average daily earnings for handysize ships were down $99 to $7,317, while those for supramax ships were down $90 to $8,956.
"The smaller segments have seen a marginal pick up in fixture activity but not enough to stem the decline in rates," analyst Hildan said.
Growing ship supply has been outpacing commodity demand for quite sometime now and is widely expected to cap dry bulk freight rate gains in the coming months.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser has fallen about 58 percent this year.