Baltic dry bulk freight index close to one-month low, increasing supply of ships

The Baltic Sea Trade Exchange's dry bulk freight index, BADI, fell to its lowest level in nearly a month on Wednesday, due to weak cargo operations and increased supply of ships to dampen market sentiment.

The Baltic Dry Index fell by 2.19 percent or 32 points to 1,430 points, the seventh consecutive day of decline, and hit the lowest since March 8.

Brokers said that the Panamax shipping market is also getting tired, adding a pessimistic tone. The support provided in the past two weeks was very mild.

The index has fallen more than 10% this year as the supply of vessels has grown faster than the demand for commodities.

Japan’s March 11 earthquake and tsunami also hit shipping operations. Japan is a major importer of dry bulk commodities such as iron ore and coal.

The Baltic Shipping Price Index (BACI) fell by 3.13%, and the average daily profit of Capesize vessels dropped to US$8,894. It was lower than the critical level of US$10,000 for the second consecutive week. Capesize vessels usually carry 150,000 tons of cargo and the cargo is mainly iron ore and coal.

The Baltic Sea Panamax freight rate BPNI fell by 2.77%. The average daily profit of Panamax vessels fell to US$14,355. The type of ship usually carries between 6 and 70,000 tons and the main cargo is coal and grain.