May 30, 2012 / 3:52 PM / 5 years ago

Baltic index slides, freight business slow

May 30 (Reuters) - The Baltic Exchange's main sea freight
index, which tracks rates to ship dry commodities, fell
on Wednesday as the market continued to struggle with slower
cargo trade and mounting fleet growth.	
    The overall index fell 3.65 percent or 36 points to 950
points. The index fell for the seventh straight day and has
declined over 45 percent this year.    	
    The outlook for dry bulk rates has been grim because ship
supply has outpaced demand to ship commodities. 	
    "Things are expected to get even worse over the coming days
as the slack demand continues," George Lazaridis of Intermodal
Shipbrokers Co said.	
    The Baltic's panamax index fell 3.87 percent to 969
points due to lower fixture activity in both the Atlantic and
Pacific basins.	
    Average daily earnings for panamaxes, which usually
transport 60,000-70,000 tonne cargoes of coal or grains, reached
$7,723, lows not seen since mid March.	
    "Panamaxes took a considerable pounding this week, as a lack
of demand left both basins heavily oversupplied. There is a
fairly bearish sentiment amongst owners now as there is little
sign of improvement" Lazaridis said.	
    The Baltic's capesize index fell 2.54 percent with 
average daily earnings falling to $5,292 -- its lowest in two
months. Capesizes typically haul 150,000 tonne cargoes such as
iron ore and coal. 	
    "We do note marginally higher fixture activity for capesizes
in both the Atlantic and Pacific basin but not enough to lend
support to free falling rates," RS Platou Markets analyst Rahul
Kapoor said.  	
    Analysts do not expect the rates to improve in the near term
as demands for both iron ore and coal looks bleak.	
    Uncertainty over prospects for the world economy could also
potentially hurt demand for raw materials.	
	
 (Reporting by Soma Das in Bangalore; Editing by Alison Birrane)

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