September 26, 2012 / 4:40 PM / 5 years ago

Record low panamax rates compound Baltic index woes

Sept 26 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Wednesday on a weak Atlantic trade for small panamax vessels.

The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 1.44 percent to 752 points.

The panamax index fell 3.4 percent to 461 points, with average daily earnings down $122 at $3,399, the lowest recorded since 1998.

Panamaxes typically transport 60,000-70,000 tonne cargos of coal or grains.

"The Panamax sector has been completely insensitive to the gains noted in both the capes and smaller size segments," ship broker Intermodal said in a note.

"The market has continued to tumble downwards as activity has remained limited while there is still a considerable amount of open tonnage in both basins," Intermodal said.

The Baltic's capesize index fell 1.21 percent to 1,549 points.

Average daily earnings for capesizes, which usually transport 150,000 tonne cargoes such as iron ore and coal, were down $212 at $7,292.

"Owners are again turning nervous after a period of increased activity and consequent climbing rate levels," broker firm Fearnleys said in its weekly report.

"Despite an ongoing flow of particularly West Australian ore cargoes, levels again ease off as the tonnage surplus proves more than sufficient to cover positive spot volume fluctuations."

Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.

China steel futures fell on Wednesday for the first time in three sessions, putting more pressure on spot iron ore prices that may drop below $100 per tonne again this week as a slowdown dents steel demand in the world's top consumer.

Average daily earnings for handysize ships were down $50 at $6,980, while those of supramax ships were down $35 at $8,822. (Reporting by NR Sethuraman in Bangalore, editing by William Hardy)

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