The Baltic Exchange’s main sea freight index extended its slide to a fourth straight session to touch a near six-month low on Thursday, as rates fell for all vessel segments amid a seasonal slowdown in demand.
The overall index, which tracks rates for ships carrying dry bulk commodities, dropped by 38 points, or 3.3 percent, to 1,114 points, the lowest since Aug. 10, 2017.
The index recorded a 15.66 percent decline in January, its biggest monthly percentage fall since May 2017.
“I think its fair to recognize that the first quarter always represents quite a much lower level of demand,” said Peter Sand, chief shipping analyst at industry lobby group BIMCO.
The capesize index shed 85 points, or 5.3 percent, to 1,528 points, having registered a 43 percent fall in January 2018.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $936 at $11,791.
Iron ore on the Dalian Commodity Exchange slipped 1 percent on Thursday amid concerns that appetite from the world’s top buyer could weaken if steel mills keep cutting production beyond winter.
China’s government ordered producers in 28 cities to cut output between mid-November and mid-March to reduce air pollution.
“So anything that comes out of current weakness, we do not expect that to be a trend of a huge change, but perhaps the weakness that we always see in the markets around that time of the year leading up to the Chinese New Year,” BIMCO’s Sand said.
The panamax index lost 33 points, or 2.34 percent, to 1,378 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, declined $263 to $11,046.
Among smaller vessels, the supramax index shed 7 points to 877 points and the handysize index lost 6 points to 552 points.
Meanwhile, the Baltic Exchange on Thursday said from March 1, 2018, the main dry index will no longer include the handysize time charter average.