* Sluggish iron ore trade, prices depress rates
* Less U.S. ballasting seen
By Jacqueline Cowhig
LONDON, Jan 26 (Reuters) - The Baltic Exchange’s main sea freight index, which tracks rates to ship dry commodities, fell again on Thursday as the fall in iron ore spot trade continued to depress rates.
The overall index which gauges the cost of shipping commodities including iron ore, coal and grain, fell 31 points or 3.95 percent to 753 points and was at its lowest since Jan. 6, 2009. It has now halved since the start of the year.
The shipping sector in coming months is expected to face a supply glut and glum economic outlook, including concerns over Chinese demand for raw materials, which will pressure earnings.
Chinese importers are unlikely to book fresh cargoes until some weeks after the ongoing Chinese Lunar New Year holidays are over, having built large stockpiles of iron ore and coal in the fourth quarter.
“The cape market particularly needs a big kick, it needs some sort of movement in the iron ore spot price, reflecting either higher demand in higher prices or a lack of it,” said Peter Norfolk, head of research at brokers FIS.
“China being out of the market because of the New Year is distorting an already generally gloomy picture,” he added.
The Asian panamax market has started to see more activity, as parts of the region have returned from Lunar New Year holidays, but there are plenty of fresh stems entering the market and tonnage for prompt dates is easily available, broker ICAP said in its latest dry bulk shipping report.
But the number of ballasters into the U.S. Gulf has fallen as sentiment seems to be improving in the Atlantic, ICAP said.
The Baltic’s capesize index fell 1.34 percent on Thursday while the panamax index fell 5.06 percent. (Reporting by Jacqueline Cowhig; editing by Keiron Henderson)