Index rose 17 points to 1,006 points
The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry commodities, rose on Wednesday for a sixth straight day, pushed up by panamax rates and supported by smaller dry bulk segments.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 17 points or 1.72 percent to 1,006 points.
“Continued strength in the Atlantic fixture activity and flow of both grain and coal cargoes is keeping the market buoyant,” RS Platou Markets analyst Rahul Kapoor said.
The Baltic’s panamax index rose 4.79 percent, with average daily earnings up at $10,332, highs not seen since mid-January.
A firmer tendency in both hemispheres, mainly driven by increased grain shipments, pushed panamax rates higher, brokerage firm Fearnleys said in its weekly report.
Average daily earnings for handysize and supramax ships were up at $8,326 and $10,184, respectively.
The Baltic’s capesize index fell 0.52 percent to 1,534 points.
Average earnings of capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, were down at $6,611.
“Sentiment is again negative, as spot volumes not by far living up to hopes/expectations. With plenty of coal stored in continent ports, transatlantic trades are at a low, and operators fall over each other at rock-bottom levels to keep their units within this geographical area,” Fearnleys wrote.
Analyst Kapoor said, however, he expected a gradual recovery in capesize rates through the second quarter of 2012, citing higher iron ore demand in top consumer China.
Shipments of iron ore, a raw material for steel, account for around a third of seaborne volumes on the larger capesizes.
“A strong rebound in Chinese steel production and declining trend being established in the Chinese iron ore inventories is being confirmed, with the latest data signaling a recovery mode for the capesize segment,” Kapoor said.
Iron ore prices have rebounded 28 percent from 2011 lows as China’s steel production has recovered to a record pace, with mills looking to a seasonal pick-up in demand.
Growing ship supply has been outpacing commodity demand and is expected to cap dry bulk freight rate gains.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, has fallen about 42 percent this year.
Source: Reuters
