Baltic sea index high on Pacific activity

Reuters: The Baltic Exchange’s main sea freight index tracking rates for ships carrying dry commodities rose on Friday for the seventh straight day, as activity in the Pacific basin helped dry bulk rates.

The main index that reflects the daily freight market rates for capesize, panamax, supramax and handysize dry bulk transport vessels rose 8 points or 1.05 percent to 771 points.

“It’s probably a temporary pick up, as there is still an issue with lots of vessels coming in,” George Lazaridis at Greek broker Intermodal said.

“The Pacific market is sort of benefiting because some of the vessel supply is not in the right place to some extent.”

Growing ship supply is outpacing commodity demand and is expected to cap dry bulk freight rate gains in the coming months.

The Baltic’s panamax index rose marginally, with daily earnings for panamaxes, which transport 60,000 to 70,000 tonne cargoes of coal or grains up at $6,786.

“The Panamax market is appearing to be in better condition,” said Oslo-based Arctic Securities.

However, Intermodal’s Lazaridis noted that the Panamaxes have bigger issues as they have had a lot of new ship deliveries in the past two months, most of the orders placed during 2010.The Baltic’s capesize index fell slightly by 0.13 percent, but, the average daily earnings were up by $3 at $5,979. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.“A major recovery is not expected in the short term unless we certainly see a turn of events with regards to some demand for some dry cargo,” Intermodal’s Lazaridis said.