Weak Vessel Demand Keeps Baltic Dry Index at Record Lows

Feb 18 (Reuters) – The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, hit another record low on Wednesday as demand for vessels fell ahead of the Lunar New Year holiday.

The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, fell 7 points or 1.36 percent to 509 points, its lowest level since the index began in January 1985.

The capesize index fell 25 points or 4.24 percent to 564 points. Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, decreased $274 to $5,447.

Iron ore prices fell near to their lowest level in almost six years on Wednesday as trading activity wound down with top buyer China away for the New Year holiday.

Shipments of iron ore account for about a third of seaborne volumes on the larger capesizes, and iron ore price developments are a key factor for dry freight.

The panamax index, which tracks vessels usually carrying coal or grain cargoes of about 60,000 to 70,000 tonnes, rose 6 points, or 1.18 percent, to 514 points. Average daily earnings for panamaxes were up $54 to $4,110.

The supramax index fell 2 points to 478 points and the handysize index fell 1 point to 260 points. (Reporting by Nallur Sethuraman; Editing by Mark Potter)