The Baltic Exchange’s main sea freight index fell to its lowest in one month on Wednesday as weakness in steel and coal markets weighed on demand for capesize and panamax vessels.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels carrying dry bulk commodities, fell 50 points, or 4.8%, to its lowest since June 5 at 994.
“Weaker steel markets and softer coal trade have led to the pressure and FFAs (forward freight agreements) have slipped as well,” Jefferies said in a note.
The capesize index shed 126 points, or about 8%, to its lowest in nearly four weeks at 1,475.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, decreased $1,045 to $12,234.
Iron ore futures were rangebound as China’s top steel-producing city of Tangshan ordered an output cut for July amid deteriorating air quality, prompting traders to assess demand prospects.
The panamax index dropped 19 points, or 1.9%, to 969, down for a twelfth straight session.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $168 to $8,723.
Among smaller vessels, the supramax index fell 10 points, or 1.3%, to 737.
Source: Reuters