Baltic main sea freight index increases for dry commodity shipments

• The Baltic Exchange recently reported a dramatic increase in the main sea freight index and tracking rates for the shipping of dry commodities. 

According to Reuters, the index rose significantly on 20^th June 2012 as result of increasing activity in the Atlantic and Pacific basins.

Beyond thta, the gauge of the shipping costs for commodities such as cement or coal which were up by 1.89 percent. A similar development was recorded for the panamax rates which rose by 0.37 percent, contributing to daily average earnings rising by U.S. $31.

“The Atlantic witnessed a strong influx of cargoes from both U.S. Gulf and ECSA, whilst the number of fresh inquiries emerging from Indonesia helped boost levels in the Pacific and reduce tonnage lists in the area”, explained George Lazaridis, Intermodal Shipbrokers Co.

However, analysts fear that the panamax rates could have a negative effect on the sea freight forwarding industry and even cause a rise in tonnage supply and tolls. The RS Platou Markets analyst, Herman Hildan, said that “[RS Platou Markets] believe further gains to be limited as high coal inventory in China hurts demand and tonnage build up exerts supply pressures.”

Further changes were noticed in the case of average daily earning for handysize and supramax shipments as well as for the capasize index, which gained five points. Here analyst also raised concerns, i.e. about the oversupply of tonnage, particularly in China which could be affected by the rising pressure of capasize rates.

Lazaridis said that he was aware that this summer and perhaps even the next year could be tough on sea freight forwarders. Afterall, this year’s overall annual main index for dry commodities showed a decrease by 44 percent.

Source: Reuters