The Baltic Exchange’s dry bulk sea freight index on Monday extended its losing run to a four-month trough as rates declined on seasonal demand weakness even as Red Sea disruptions kept market participants on edge.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, lost 100 points, or 6.9%, to 1,360- its lowest level since mid-September.
The capesize index dropped by 292 points, or 13.4%, to 1,880, its weakest in four months.
Average daily earnings for capesize vessels, which typically transport 150,000-ton cargoes such as iron ore and coal, decreased by $2,426 to $15,589.
“There is a noticeable downward trend in freight market indices. Typically, the demand for goods declines in the first two to three months of each year. Additionally, there has been a significant reduction in congestion at Brazilian ports, particularly at Santos,” said Yiannis Parganas, director of Intermodal Shipbrokers.
Meanwhile, the chief negotiator for Yemen’s Houthis said on Monday the group’s stance has not changed since U.S.-led air strikes on its positions, and warned that attacks on ships headed to Israel will continue.
“It’s reasonable to speculate that if the situation deteriorates, ships passing through the Red Sea will require significantly higher premiums due to the increased risk or many owners may choose to avoid this route, leading to an increase in ton-miles,” Parganas added.
The panamax index was up 2 points, or 0.1%, to 1,412, after dropping to its lowest since Aug. 15 on Friday.
Average daily earnings for panamax vessels, which usually carries about 60,000 to 70,000 tons of coal or grain cargo, rose by $16 to $12,709.
Among smaller vessels, the supramax index was down 10 points, or 0.9% to 1,078, hitting its lowest level in about four months.
Source: Reuters reported by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru and edited by Jason Neely
