The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell to its lowest level in nearly three weeks on Tuesday, weighed down by dwindling demand across all vessel segments.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, fell 54 points, or about 3.7%, to 1,402, its lowest since March 9.
“The markets may be hit by a curveball, with the potential threat of a cut in China’s steel production looming,” shipbroker Allied wrote in a weekly report, adding “such a development would mean a reduction of iron ore imports, leaving some large dry bulkers under utilized.”
The capesize index lost 149 points, or 8.3%, to 1,646, its biggest drop since Feb. 16.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, decreased $1,233 to $13,655.
The panamax index shed 4 points, or about 0.3%, to its lowest since March 2 at 1,561.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $34 to $14,051.
Among smaller vessels, the supramax index lost 11 points to 1,315.
Iron ore futures extended their rebound as easing worries about the banking sector lifted steel price benchmarks in Shanghai, though lingering concern about demand prospects in top steel producer China limited gains.