* Capesieze index falls again
* Panamaxes firm on coal fixtures
* Market seen remaining flat for the week
By Krishna N Das
BANGALORE, July 25 (Reuters) - The Baltic Exchange’s main sea freight index , which tracks rates to ship dry commodities, fell for the 12th straight session on Monday as rates for capesizes remained low due to a lack of iron ore cargoes.
The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, fell 6 points, or 0.45 percent, to 1,317 points. The index has been erratic this year, trading between 1,300 and 1,500 points as ship oversupply outpaces demand to ship commodities.
“We have seen a drop in activity especially from iron ore cargo, mainly due to drop in demand compared with about four weeks ago,” said George Lazaridis, head of research with Greek shipbroker Intermodal.
Spot iron ore prices were steady on Monday as traders looked for clearer direction on the market at the beginning of the week, amid increasing reluctance to buy the raw material at rising prices and easing Shanghai rebar futures.
The Baltic’s capesize index fell 0.76 percent, with average earnings down at $10,616. Rates for capesizes, which typically haul 150,000 tonne cargoes such as iron ore and coal, decreased 19.2 percent to $9,973 last week as too many ships chased too few cargoes.
“The dry bulk shipping market is likely to remain challenging for the foreseeable future, given the significant number of new shipyard deliveries,” Jefferies analyst Douglas Mavrinac said.
Even though low capesize rates have impacted panamax earnings too, they have remained steady due to higher coal activity.
On Monday, the Baltic’s panamax index rose 0.33 percent, with average daily earnings at $12,301.
“We have seen a lot of coal activity in general... but grain activity remains fairly minimal compared with last year,” Lazaridis said.
The growth in trade of major bulk shipments is expected to slow to 3.5 percent this year from 12 percent last year, Wells Fargo said in a note, adding trade in minor bulk goods is expected to increase by about 5 percent.
“While the Pacific Panamax and Supramax market continues to under perform the Atlantic, ballasters to the Atlantic could help normalize the rate differential,” Deutsche Bank analyst Justin Yagerman said in a note.
Intermodal’s Lazaridis expects the market to remain like this for the end of the week as well.
“We don’t really expect any big changes, both positive and negative... capesize index could continue to fall,” he said. (Editing by James Jukwey)