Baltic index drops to lowest in over seven weeks

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The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, extended declines on Tuesday pressured by lower demand for panamax and supramax vessel segments.

The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, fell by 5 points or 0.5% to 962, its lowest in more than seven weeks.

The capesize index edged up by 2 points to 1,424.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, increased by $11 to $11,806.

“Consistent flows from Brazil look set to continue and in conjunction with a tightening Atlantic tonnage list, we could see rates strengthen in the near future,” shipbroker Allied wrote about the capesize segment in a weekly note.

Iron ore futures rose as China’s pledge to provide more support for its flagging economy lifted sentiment, while expectations of a possible steel output cap at the top consumer strengthened steel prices.

The panamax index also shed 15 points or 1.7% to 895, continuing its declining streak for the eighth straight session.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, declined by $132 to $8,054.

Among smaller vessels, the supramax index fell by 4 points to 753.

The Kremlin said it was impossible for Russia to return to the Black Sea grain export deal until an agreement related to Russian interests was honoured.

Source: Reuters

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