The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell to its lowest in more than two months on Tuesday amid a fall in rates across segments.
The overall index, factoring rates for capesize, panamax, and supramax shipping vessels, fell 91 points, or almost 4%, to 2,204 points, its lowest since April 20.
The capesize index lost 180 points, or about 7.7%, to 2,152 points, its lowest since May 3.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, lost $1,487 to $17,849.
While the dry bulk sector has benefited from increased coal flows, amid power shortages in Europe and Asia, faltering steel demand from China and slowing global growth could “keep iron ore and metallurgical coal trade flows at a slumbering pace,” George Lazaridis, research head for Allied Shipbroking wrote in a weekly note.
Meanwhile, iron ore climbed to a one-week high, as China eased some quarantine requirements for international arrivals which sparked a broad-based rally in metals.
But a sustainable rally for China’s ferrous complex remains uncertain as Beijing is ruling out flood-like stimulus. Its resolve to limit steel output this year at below 2021 production to curb emissions could also hurt demand.
The panamax index was down 86 points, or over 3.2%, at 2,566 points, its lowest in over four months.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $778 to $23,092.
The supramax index fell 23 points to 2,416 points.
Peter Sand, analyst for logistics data firm Xeneta, wrote in a note that global spending on shipping could hit a record high this year, as congestion and delays continue to plague shippers on several major trades.