- The overall Baltic Exchange dry bulk sea freight index slipped by 5 points.
- This dip is expected to reverse with increased South American grain exports.
- Houthi activities in the Red Sea have caused concern among shipping companies.
The overall Baltic Exchange dry bulk sea freight index (.BADI) slipped by 5 points to 2,086, marking its lowest since late November due to reduced rates in panamax and supramax vessels. However, the capesize index (.BACI) surged to a two-week high, rising by 82 points to 3,651, with average daily earnings for these vessels climbing to $30,282 on the back of increased demand for transporting cargoes like iron ore and coal, reports Hot copper.
Market Insights and Analyst Predictions
Shipbroker Fearnleys anticipates a February rebound in the Panamax market following a drop in rates due to tonnage oversupply in the Atlantic. This dip is expected to reverse with increased South American grain exports.
Analyst Filipe Gouveia from BIMCO predicts a potential 5-6% rise in grain exports from the southern hemisphere in 2024, led by Argentina’s substantial harvests. This projection could heighten demand for panamax and supramax ships, given the extended sailing distances for Argentinian grain shipments.
Segment-Specific Performance
The panamax index (.BPNI) hit its lowest since November 15, dropping 81 points to 1,727. Daily earnings for panamax vessels (.BPWT) also saw a decline of $728 to $15,543, impacting the segment notably.
Conversely, the supramax index (.BSIS) continued its 16th consecutive session of decline, falling by 35 points to 1,236, indicating sustained challenges in this segment.
Geopolitical Impact on Shipping
Yemen’s Houthi activities in the Red Sea have caused concern among shipping companies. Militant attacks leading to the closure of the Suez Canal have contributed to a market value increase of approximately $18 billion for companies like Maersk and Hapag-Lloyd since mid-December.
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Source: Hot Copper
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