Baltic index gains on robust capesize, supramax demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Wednesday, supported by increasing demand in the capesize and supramax vessel segments.

The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, gained 42 points, or 2.6%, at 1,640.

The capesize index was up 121 points, or 4.8%, at 2,630 — its highest since late December.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes carrying commodities such as iron ore and coal, increased $121 to $2,630.

“Transatlantic activity against a weaker tonnage demand for both Brazilian and Australian stems toward China” improved capesize earnings, shipbroker Intermodal wrote in a weekly note.

Benchmark iron ore futures rose on renewed optimism around demand prospects in top steel producer China, though other steelmaking ingredients, including coking coal, slumped after a two-day advance.

Among smaller vessels, the supramax index was up 17 points at 1,114.

The panamax index slipped 13 points to 1,481 — its lowest in over 10 weeks.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, lost $117 at $13,333.

“Brazil’s record harvest this year could benefit the panamax and supramax ships,” BIMCO’s shipping analyst Filipe Gouveia wrote in a note.

“However, higher exports of other animal feed products such as soybeans and soybean meal could offset the loss. Overall, we expect global exports of grains to stagnate this year,” Gouveia added.
Source: Reuters