The Baltic Dry Index continued its upward trend for the sixth consecutive session, driven by the recovery in the Capesize segment. However, commodity prices, including oil, experienced a decline, influenced by a stronger US dollar, reports Breakwave Advisors.
Freight and Bunker Markets
The Baltic Dry Index rose for a sixth consecutive session on Tuesday, propelled higher by the capsizes and the panamaxes. Still, most of the headline indicator’s 4.9 per cent gain originated from the largest segment.
The gauge for the capsizes surged by 9.4 per cent, fuelled by rising global spot demand and lower vessel availability in the Atlantic. The index for the panamaxes rose by 1.0 per cent, supported by relatively robust demand in the Atlantic and Pacific basins. The indicator for the supramaxes shed 1.2 percent, with soft demand in the Atlantic contributing to the loss. The index for the handysizes retreated by 0.6 percent amid rising tonnage supply.
The Baltic Exchange’s wet freight gauges maintained the recent narrative of losses for the clean and dirty tankers, while the indices for the liquified gas carriers avoided the red for a second day. Concerns over demand contributed to the dirty tanker index declining by 0.9 per cent, while the gauge for the clean tankers shed 0.4 per cent. After remaining unchanged on Monday, the freight index for the LNG carriers gained 1.0 per cent yesterday, while the LPG freight gauge rose by 2.5 per cent.
The View from the Shipfix Desk
The Baltic Exchange’s index for the supramaxes has not recorded a day of gains for the past month. While the gauge has had a few days of no change, it has declined by more than seventeen percent over the past month, lagging behind all of the other segments. The recent decline has also contributed to the index being 22 per cent lower than at the same time last year.
While last week saw demand for supramaxes picking up in the Pacific and Indian Oceans, volumes were significantly lower than a year ago. Continued weakness in the Atlantic saw cargo order volumes 58 percent lower than during the same period in 2023. In the Pacific, demand was 42 percent lower, while the Indian Ocean saw a 50 per cent drop. The current week has come off to a weak start, with volumes at the moment looking to fall short of last week’s amid weakness in the Atlantic and Pacific basins.
The weak demand for the supramaxes has, to some extent, been offset by pressure on vessel supply in the Pacific and the Atlantic. Last week, the number of vessels available in the two basins was lower than the long-term average. On the other hand, the Indian Ocean remained well-supplied last week after a brief dip during the preceding seven days.
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Source: Breakwave Advisors
