The Baltic Exchange’s main sea freight index extended losses on Monday to hit its lowest since February, weighed down by slowing demand for iron ore and coal shipments from China.

The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, shed 23 points, or 1.2% to 1,872 points.

The index touched its lowest level since Feb. 9.

The capesize index lost 19 points, or 0.9%, at 2,062 points.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $155 to $17,100.

“The biggest difficulty that the drive bulk sector is facing is coming from the Chinese economy. There is decreasing demand for mineral, both iron ore and coal cargoes especially from South America, Brazil and Indonesia,” said Yiannis Parganas, research analyst for Intermodal.

“And of course, due to the slowdown in the European economy, we’ve seen a decline in steel demand there as well,” Parganas added.

China’s factory activity contracted unexpectedly in July after bouncing back from COVID-19 lockdowns the month before, as fresh virus flare-ups and a darkening global outlook weighed on demand, a survey showed on Sunday.

However, iron ore prices edged higher on Monday, extending gains spurred by hopes of increased infrastructure spending and prospects of property sector bailouts in China.

The panamax index was down seven points, or 0.3%, at 2,044 points.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $71 to $18,392.

Among smaller vessels, the supramax index fell 43 points to 1,928 points, while the handysize index shed 19 points to 1,154 points.

Source: Reuters