Capesize Strength Propels Baltic Index to 9-Year High

Maritime Activity Reports, Inc.

August 30, 2019

Peter Sand, chief shipping analyst at BIMCO

Peter Sand, chief shipping analyst at BIMCO

The Baltic Exchange's main sea freight index climbed to a near nine-year peak on Friday propelled by robust capesize demand, with rates for all the vessel segments scaling multi-year highs.

The Baltic index, which tracks rates for ships ferrying dry bulk commodities, rose 101 points, or 4.4%, to 2,378, a peak since November 2010. The main index also posted a 27.3% monthly increase, extending its winning streak to a sixth month.

The capesize index jumped 261 points, or 6.2%, to 4,467, a level last seen more than 9 years ago. The index also posted its third weekly gain, up about 11.9%. Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, rose $2,392 to $34,583. Helping capesize demand, iron ore shipments have risen after the resumption of operations at Vale's mines in Brazil following a dam disaster early this year, and as Australian ports ramp up shipments since a cyclone struck in March.

"Without doubt, the exports out of Brazil are an important market of cargoes for the capesizes. But we've seen a broader market lift of the capesizes too," said Peter Sand, chief shipping analyst at BIMCO. "The Baltic (main index) is much more driven by capesizes as opposed to a much more balanced index just a couple of years ago."

The panamax index gained 11 points, or 0.5%, to 2,260, its highest in over 8-1/2 years. The index has risen 2.9% this week. * Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, rose $86 to $18,098.

The supramax index was up 8 points at 1,336, its highest since December 2013.

Reporting by Shreyansi Singh

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