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Baltic Index’s worst quarter for 14 years

Global – Due to an expanding fleet and weaker demand weighing on charter costs for the two largest classes of vessels tracked by the Baltic Dry Index, it experienced the worst quarter since 1998, according to latest figures compiled by Bloomberg.

The costs of shipping commodities are on the rise for the first time this week, gaining 3% and thus extending this month’€™s increase to a total of 9%. Meanwhile, daily returns for Capesize ships reveal the least promising numbers since October 1999 at just US$ 4814. The second biggest iron ore and coal carriers, Panamaxes, did little better with an average of US$ 6658 – the worst return since the last quarter of 2001.

Danish operator D/S Norden A/S has said in a statement: ‘€˜It is without a doubt the dry-cargo market which is ahead when it comes to imbalance between the supply of vessels and the demand for vessels for transport of coal, iron ore, grain. The consequences for the shipping companies are the critically low freight rates.’€™

According to data from world-leading shipbroker Clarkson Plc, the largest fleet ever has competed for business in the current period as slowing steel demand led mills in China to buy less iron ore. It also observes that dry-bulk vessel deliveries of 33 million deadweight tons in the second quarter of this year were the highest on record going back to 1970.

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Source: Manila Bulletin

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