The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, spiralled downwards to its lowest level in nearly three decades as rates for all the four vessel types continued to flounder.
The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, was down 34 points, or 5.11 percent, at 632 points, the lowest since August 1986. The index is also seen by investors as an indicator of global industrial activity.
Brokers said the dry bulk market was expected remain in the doldrums due to weak commodity demand at present especially from top global importer China.
“Dry bulk remains under pressure across all segments on the back of very thin spot demand,” Omar Nokta of Clarkson Capital Markets, said.
Weak demand for commodities, such as iron ore, has put pressure on smaller, higher-cost producers and this has taken its toll on the dry freight market.
“We believe that despite softer prices/margins, low cost Australian producers will continue to meet targeted production with negative implications for dry bulk tonne-mile demand,” Wells Fargo Securities analyst Michael Webber said, referring to producers such as Rio Tinto and BHP Billiton....MORE
Thursday, January 29, 2015
Shipping: "Baltic Dry Index Death Spirals to Near 30-Year Low"
From Reuters via gCaptain: