The Baltic Dry Index (BDI) fell to its lowest level in a half year as holidays and lacklustre demand weighed heavily on dry bulk shipping.
The BDI, which serves as a barometer for dry bulk market performance, slipped 5.3% over the past week to 1,477 points on Friday to go under 1,500 points for the first time it came in at 1,422 points on 7 February.
Each of dry bulk shipping’s four sectors saw lower spot rates during this period as holidays in the northern hemisphere and Asia met with limited fixture activity driven by low demand for dry commodities.
The Baltic Exchange’s capesize 5TC, a spot-rate average across five key routes, slid 6.9% over the week to $10,898 per day on Friday.
“The capesize market continues to dwell in the doldrums as any attempts to spark a rally were quickly dealt a hammer blow,” Baltic Exchange analysts wrote on Friday in their weekly dry bulk wrapup.
“This rate level is less than a third of the same time last year. … The dire rate levels at this time of the year are a strong signal of the poor demand currently being seen.”
Australian miner Rio Tinto fixed three unnamed capesizes on Friday to ship 170,000 tonnes of iron ore each from Dampier, Australia to Qingdao, China, at $8.05, $8.10 and $8.15 per tonne respectively.
The ships will be loaded from 28 to 31 August.
A week ago, Australian mining giant BHP ‘hired an unnamed capesize to carry the same amount of ore from Port Hedland, Australia, to Qingdao at $7.85 per tonne after loading the vessel from 18 to 20 August.
The panamax 5TC declined 2.9% over the week to $17,167 per day, while the supramax 10TC slipped 6.3% to $17,526 per day on Friday.
“With the continued northern hemisphere holiday season and various national holidays in Asia, it was another lacklustre week overall,” the analysts said.
Handysize spot rates, which are excluded from calculating the BDI, also weakened over the week. The handysize 10TC dropped 7.6% to $17,598 per day on Friday.
“In a week punctuated by national holidays, the negative sentiment of recent times continued seeing the BHSI [Baltic Handysize Index] drop below 1,000 points for the first time since January,” they added.
“With brokers speaking of a continued lack of fresh enquiry across both basins, the outlook for the near future remains bleak for owners in what is being described as a summer lull.”
