The Baltic Exchange’s dry bulk sea freight index rose to scale an over-three-week high on Monday due to an increase in larger vessel rates.
The main index, which monitors rates for capesize, panamax and supramax shipping vessels, added 30 points, to 1,403 points.
The capesize index rose 91 points, or 4.8%, to 1,980, its highest since April 7.
Average daily earnings for capesize vessels, which typically transport 150,000-ton cargoes such as iron ore and coal, increased by $753 to $16,420.
Yiannis Parganas, head of Intermodal’s research department, said that traders are trying to utilize an open window of 180 days before the port fee tariffs proposed by the U.S. Trade Representative are implemented in order to secure some stems and capitalize on the no-tariff situation, increasing trade activity.
The U.S. Trade Representative agency said on April 17 that there would be no port fees for the first 180 days, following which levies will be assessed per journey or port rotation, amongst other concessions.
Meanwhile, iron ore futures prices fell, weighed down by the likelihood of China cutting crude steel output, although losses were capped by a continued rise in demand for the steelmaking ingredient.
The panamax index gained for the ninth straight session, and was up 3 points at 1,395.
Average daily earnings for panamax vessels, which usually carry 60,000-70,000 tons of coal or grain, rose by $27 at $12,555.
On his long-term outlook, Parganas said, “We might see a slowdown in activity, especially if the U.S. and China do not come to a positive conclusion. However, there is much uncertainty… there will be misbalance between supply and demand, which will pressure rates downward”.
Among smaller vessels, the supramax index (.BSIS) fell two points to 975.
Source: Reuters
