Baltic Index Pressured And Falls For This Reason

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A recent news article published in the Hot Copper states that Baltic index dips as larger vessels retreat.

Baltic Index falls

The Baltic Exchange’s main sea freight index .BADI fell on Tuesday, snapping a five-day winning streak, pressured by a fall in the capesize and panamax segments.

The overall index, which factors in rates for capesize, panamax and supramax vessels, dipped 112 points, or 4.3%, to 2,484.

The capesize index .BACI lost 321 points, or 10.6%, to 2,710.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, decreased by $2,661 to $22,477.

“A potential stronger availability in tonnage has helped boost rates on the West Australia—China trade… despite the somehow relatively mediocre fixing activity,” Allied Shipbroking said in a weekly note referring to the capesize segment.

Meanwhile, Singapore iron ore futures rebounded after a run of sell-offs triggered by pessimism over demand from top steel producer China, but prices in Dalian remained under pressure.

Shipping companies are transforming rust buckets into gold mines in a modern-day alchemy that could fuel already rampant inflation for years. The disruption to world trade due to the pandemic and a shortage of new cargo vessels has pushed freight rates for ageing container ships to record highs.

The panamax index .BPNI dropped 21 points, or 0.7%, to 2,851 points.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000-70,000 tonnes, decreased by $190 to $25,656.

The supramax index .BSIS edged up 1 point to 2,471.

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Source: Hot Copper

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