Baltic Index Dips to Near 1-Year Low
The Baltic Exchange's main sea freight index fell to its lowest since February on Wednesday, hurt by a seasonal slowdown in demand amid higher costs for shipowners due to a new regulation for shipping fuels.
The Baltic index, which tracks rates for capesize, panamax and supramax vessels ferrying dry bulk commodities, fell 66 points, or 9.6%, to 623.
The capesize index slipped 170 points, or 34.3%, to 325.
The capesize index registered its 29th consecutive session of losses, touching its lowest level since April last year.
Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes including iron ore and coal, dropped $1,151 to $5,911.
"Fuel is getting much more expensive so ship-owners are struggling to make profit due to increased costs under the new International Maritime 2020 regulations," said Jo Ringheim, equity research analyst at Arctic Securities.
Tougher rules on sulphur emissions from ships came into effect in January, in the biggest shake-up for the oil and shipping industries for decades.
"We are heading into a softer seasonal period of the year with lower iron ore trade," Ringheim said, adding the Chinese new year holidays could also dent demand.
The panamax index fell 64 points, or 7.8%, to 760.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, declined $574 to $6,844.
The supramax index fell by 6 points to 550 points.
(Reporting by Anjishnu Mondal in Bengaluru; Editing by Aditya Soni)