Baltic Index Approaches 6-Month Low

by Arpan Varghese (Reuters) – The Baltic Exchange’s main sea freight index extended its slide to a fourth straight session to touch a near six-month low on Thursday, as rates fell for all vessel segments amid a seasonal slowdown in demand.

The overall index, which tracks rates for ships carrying dry bulk commodities, dropped by 38 points, or 3.3 percent, to 1,114 points, the lowest since Aug. 10, 2017. The index recorded a 15.66 percent decline in January, its biggest monthly percentage fall since May 2017.

“I think its fair to recognize that the first quarter always represents quite a much lower level of demand,” said Peter Sand, chief shipping analyst at industry lobby group BIMCO.

Iron ore on the Dalian Commodity Exchange slipped 1 percent on Thursday amid concerns that appetite from China could weaken if steel mills keep cutting production beyond winter. China’s government ordered producers in 28 cities to cut output between mid-November and mid-March to reduce air pollution.

“Anything that comes out of current weakness, we do not expect that to be a trend of a huge change,” said Sand. “But perhaps the weakness that we always see in the markets around that time of the year leading up to the Chinese New Year,”

The panamax index lost 33 points, or 2.34 percent, to 1,378 points.

Meanwhile, the Baltic Exchange on Thursday said from March 1, 2018, the main dry index will no longer include the handysize time charter average.

(Reporting by Arpan Varghese in Bengaluru)