Jan 15 (Reuters) – The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying industrial commodities, touched a record low for the ninth straight session Friday, mostly due to vessel oversupply and lack of global demand.
The overall index, which gauges the cost of shipping dry bulk cargoes including iron ore, cement, grain, coal and fertiliser, was down 10 points, or 2.61 percent, at 373 points.
The index has plunged by over hundred points or about 22 percent this year. On Wednesday, it fell below 400 points for the first time on record.
The capesize, panamax and handysize indices also touched record lows on Friday.
The dry bulk sector has taken a beating from the slowdown in Chinese business at a time when the sector is struggling with huge overcapacity.
The capesize index shed 27 points, or 12 percent, to 198 points on Thursday. Average daily earnings for capesize vessels dropped $193 to a record low of $2,748.
“(The) fundamental problem is not fleet growth but negative demand growth. Slowing economic growth and significant turmoil in commodity prices is resulting in extremely low chartering activity,” said Clarksons Platou analyst Frode Morkedal.
Morkedal expects ship scrapping activities to surge and newbuild deliveries to be postponed, resulting lower fleet growth this year.
Capesizes typically transport 150,000-tonne cargoes such as iron ore and coal and have been particularly affected by a fall-off in coal and iron ore demand in China.
The panamax index dropped 7 points to 381 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell $54 to $3,049. (Reporting By Nallur Sethuraman in Bengaluru; Editing by Katharine Houreld)
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