Baltic index snaps 10-day gaining streak as capesize rates ease
The Baltic Exchange’s main sea freight index fell on Tuesday, breaking a 10-day winning streak as rates for capesize vessels eased, while the sentiment still remained positive on the outlook for higher iron ore shipments.
The Baltic index, which tracks rates for ships ferrying dry bulk commodities, fell 1.2%, or 26 points, to 2,165 points after hitting a peak since December 2013 in the previous session.
The index has more than tripled since February, mainly driven by strong demand for vessels that ship iron ore from Brazil into China.
Port stocks of seaborne iron ore across China stood at 118.35 million tonnes as of July 19, rebounding from a two-and-a-half-year low of 115.25 million tonnes on June 28, data tracked by SteelHome consultancy showed.
Iron ore’s spot and futures prices hit their highest levels in more than five years earlier this month on concerns about supply, as top producers in Australia and Brazil have lowered shipment and output guidance for 2019.
The capesize index fell 123 points, or 2.8%, to 4,315 points, after hitting levels last seen in October 2010 in the previous session.
Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, fell $885 to $32,078.
Analysts, however, see the positive momentum in the capesize to continue with slight corrections.
Major iorn ore miners like Vale and BHP Group Ltd are also likely to be seeking to move as much volume as possible during the summer months prior to their respective scheduled major maintenance plans in autumn, Allied Shipbroking said in a note.
The panamax index rose 18 points, or 0.8%, to 2,219 points, its highest since December 2010.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, rose $145 to $17,742.
The supramax index was 15 points higher at 1,017 points.
Source: Reuters (Reporting by Nallur Sethuraman in Bengaluru)