Higher rates for smaller vessels push Baltic index up

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The Baltic Exchange’s main sea freight index rose for a ninth straight session on Wednesday, as strong demand for panamax and supramax vessels more than offset waning capesize demand.

The Baltic index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, rose 9 points, or 1.8%, to 517 points.

The capesize index fell 12 points to -290.

Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes including iron ore and coal, declined by $117 to $2,358.

“Seasonality, higher fuel costs, and coronavirus disruption behind poor start to new decade for dry bulk earnings,” BIMCO Chief Shipping Analyst Peter Sand said in a note.

“The fundamental balance will continue to deteriorate in 2020, offering little support to operators hoping to pass on higher fuels costs, caused by the sulphur cap, to shippers.”

The panamax index gained 29 points, or 3.5%, to 859 points and posted its 15th straight session of gains.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000-70,000 tonnes, increased by $266 to $7,733.

The supramax index climbed 16 points to 577.

Source: Reuters

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