This decline is attributed to cooling demand in larger vessel segments, particularly Capesizes, despite a strong first half of the year. An increase in vessels sailing without cargo signals weakening demand relative to supply.
iStockBulk shipping rates, measured by the Baltic Dry Index, have fallen for eight consecutive days, reaching their lowest point since late 2023.
A key measure of bulk shipping rates dropped for an eighth consecutive day as demand in the larger vessel segments cooled following a multi-month rally that pushed the market to its highest level since late 2023. The Baltic Dry Index fell 3.4% to 2,818 points on Tuesday, marking its longest losing streak since mid-January. The gauge tracks freight rates for Capesize, Panamax and Supramax ships transporting raw materials such as iron ore, coal and grain.
“It’s attributed to the recent loss of momentum in the Capesize segment, but we should note that it has still delivered the strongest first half of the year in the past three years,” said Maria Bertzeletou, a senior market analyst at Signal Group.
Bloomberg
The index has been on a tear this year, supported by strong demand and volatility linked to the conflict in the Middle East. The Capesize segment accounts for about 40% of the Baltic Dry Index and is the vessel class most exposed to iron ore, a key steelmaking ingredient.
Bertzeletou said the fall in the Capesize market coincides with a rise in the number of ballasters, or vessels sailing without cargo. A growing ballast fleet can signal weakening demand relative to vessel supply. The Panamax segment declined about 5% over the past week, with one of its key routes also appearing to accumulate a larger ballast fleet, she said.
Iron ore futures in Singapore were up 0.1% at $100.80 a ton as of 10:42 a.m. local time. Elsewhere in the ferrous complex, yuan-priced coking coal on the Dalian Exchange was down 0.6%.
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