The Baltic Exchange’s main sea freight index on Tuesday dropped for a third straight session to its lowest in over two weeks, as a seasonal dip in Chinese demand weighed on vessel rates.
The Baltic dry index, tracking rates for capesize, panamax and supramax vessels ferrying dry bulk commodities, fell 106 points, or 6%, to 1,659 – its weakest since Jan. 8.
This is a seasonal decline in prices in the run-up to the Chinese New Year holidays, but sentiment remains stronger than usual, as China’s government is pushing to keep the economy going through the festivities, said Rebecca Galanopoulos Jones, head of research at Alibra Shipping.
Fearing COVID-19 cases, lost profits and possible lockdowns, China’s local governments and factories offered a slew of incentives earlier this month to persuade workers not to go home for the Lunar New Year holiday in February.
The capesize index was down 320 points, or 11.4%, at 2,497, its lowest since Jan. 7.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, slid $2,657 to $20,709.
Benchmark iron ore futures on the Dalian Commodity Exchange declined 1.5% on Tuesday to 1,026 yuan a tonne.
The panamax index edged 5 points, or 0.3%, lower to 1,660.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, fell $45 to $14,943.
The supramax index was up 6 points at 1,158 – its highest since end-October 2019.