Sept 12 (Reuters) - The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry commodities, fell on Wednesday as rates for panamax and capesize vessels weakened.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell 1 point or 0.15 percent to 661 points.
The Baltic’s panamax index dipped 21 points or 3.71 percent to 545 points.
“The negative trend and poor sentiment continues in the Panamax sector as in the other dry segments,” ship broker Fearnleys said in its weekly note.
Average daily earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, have fallen about 67 percent this year and were down $171 at $4,323 on Wednesday.
The Baltic’s capesize index slipped 1 point to 1,186 points. Average daily earnings for capesizes, however, were up $25 to $3,490.
Shipments of iron ore account for about a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
Shanghai steel futures steadied on Wednesday as excitement over the $158 billion worth of infrastructure projects approved by China began to lose steam, possibly stalling a rebound in iron ore prices that have surged 15 percent over three sessions.
“Commodity market sentiment lost steam with reports that the impact on steel demand would likely take more time than initially expected as the China infrastructure investments announced last week would be spread over several years,” RS Platou Markets analyst Frode Morkedal said in a note.
The projects, which involve building highways, ports and airport runways are likely to take years, which means steel demand from China, the world’s top consumer, could remain sluggish at least for the rest of this year.
Average daily earnings for handysize ships were up $66 to $6,876, while those for supramax ships were up $46 to $8,626.
Growing ship supply has been outpacing commodity demand for some time and is widely expected to cap dry bulk freight rate gains in the coming months.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser has fallen about 62 percent this year. (Reporting by Koustav Samanta in Bangalore; Editing by Anthony Barker)