July 19, 2012 / 3:27 PM / 6 years ago

Baltic's freight index slides on sluggish demand

July 19 (Reuters) - The Baltic Exchange's main sea freight
index, tracking rates for ships carrying dry
commodities, fell on Thursday for the eighth straight day as the
market continued to struggle with slower cargo trade and
mounting fleet growth. 
    The overall index, a gauge of the cost of shipping
commodities such as iron ore, cement, grain, coal and
fertiliser, fell 21 points or 1.96 percent to 1,053 points.
    The Baltic's panamax index fell 1.91 percent, with
average daily earnings for panamaxes down $186 to $9,432.
    The Baltic's capesize index dropped 0.78 percent to
1,276 points. Larger capesize vessels typically transport
150,000-tonne cargoes such as iron ore and coal.
    The average daily earnings for the capesize vessels fell
$159 to $5,383, amid a sluggish iron ore demand in top consumer
     Shipments of iron ore, used to make steel, account for
about a third of seaborne volumes on the larger capesizes, and
brokers said price developments remained a key factor for dry
    Iron ore prices were down 26 percent from a year ago, but
traders said buyers are still not biting, convinced prices would
fall more with Chinese steel mills likely to curb output
     The price slide, fueled by a decline in steel prices,
prompted Chinese mills to seek delays of shipments from miners
and to move contract pricing even closer to daily spot rates.
    Average daily earnings for handysize ships were down $89 to
$9,635, while those for supramax ships were down $283 to
    Growing ship supply has been outpacing commodity demand for
some time now and is expected to cap dry bulk freight rate gains
in the coming months.
    The main index, which factors in the average daily earnings
of capesize, panamax, supramax and handysize dry bulk transport
vessels, has fallen more than 39 percent this year.

 (Reporting by Soma Das in Bangalore, editing by William Hardy)
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