The Baltic Exchange’s dry bulk sea freight index, which monitors rates for vessels moving dry bulk commodities, extended losses for a second day on Wednesday, pressured by weakness in larger capesize vessel rates.
The main index, which factors in rates for capesize, panamax and supramax shipping vessels, fell 25 points, or 1.2%, to 1,997 points.
The index had posted its worst day in two-weeks on Tuesday.
The capesize index fell 91 points, or 3%, to 2,916 points.
Average daily earnings for capesize vessels, which typically transport 150,000-ton cargoes such as iron ore and coal, decreased by $753 to $24,185.
Iron ore futures fell for a second straight session, driven by concerns over the demand outlook stemming from a worsening Sino-U.S. trade spat and rising steel stocks in top consumer China.
The U.S. and China on Tuesday began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil, making the high seas a key front in the trade war between the world’s two largest economies.
“This development is expected to influence trade flows, potentially raise operational costs, and inject additional volatility into freight sentiment,” said Nikos Tagoulis, senior analyst at Intermodal in a weekly note.
“The avoidance of Chinese cargoes by U.S.-linked vessels is likely to tighten effective tonnage availability, providing sustained support to freight rates rather than a purely temporary spike,” said Tagoulis.
The panamax index rose 0.3% to 1,821 points.
Average daily earnings for panamax vessels, which usually carry 60,000-70,000 tons of coal or grain, rose by $49 to $16,386.
Among smaller vessels, the supramax index rose 0.7% to 1,418 points.
Source: Reuters