* Fewer enquires for cargoes
* Main index drifting lower
By Jonathan Saul
LONDON, Aug 24 (Reuters) - The Baltic Exchange’s main sea freight index .BADI, which tracks rates to ship dry commodities, stayed at over a three-month low on Monday as slack demand and slower cargo enquiry hurt sentiment.
The index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, dropped 1.26 percent or 31 points to 2,437 points on Monday, and was at its lowest since May 14.
“It seems there is a bit less congestion around and it seems there is a bit less fresh enquiry from charterers (shippers) and a few more ships around,” said Peter Norfolk, a director with SSY Consultancy and Research. “Things are a bit looser.”
In recent months Chinese demand for iron ore — the primary material in the manufacture of steel — has driven freight market activity while also adding to swings on the main index.
But weaker Chinese demand for iron ore and coal has taken its toll on freight rates, compounded by still depressed global demand.
Port congestion in China as well as off Australia’s coast had previously tied up a large number of Capesize vessels, typically hauling 150,000 tonne cargoes such as iron ore and coal.
Brokers have said the number of vessels waiting to discharge off China was easing, with more Capesize tonnage becoming available in the Atlantic.
The main sea freight index hit a more than eight-month high on June 3 of 4,291 but has been erratic since then. It has fallen 27 percent in the past month.
The Baltic’s Capesize index .BACI dropped 1.61 percent on Monday, helping to drag the Panamax index .BPNI of smaller sized ships lower.
Average Capesize earnings have fallen by nearly 60 percent to $38,039 per day since their June peak this year, with shippers able to push rates lower.
“(Ship) owners’ sentiment in the Capesize sector appears to be turning negative quickly, in our opinion, as spot chartering activity slowed noticeably last week,” Cantor Fitzgerald said in a report.
There have been growing hopes that freight rates could get a lift from expected interest for iron ore from European buyers as well as in Japan and South Korea. “We believe the outlook for the dry bulk shipping market remains attractive as infrastructure-related spending should continue to stimulate dry bulk shipping demand,” Jefferies & Company said in a note.
But concerns continue to grow over the rising number of new ships set to hit the market in the coming months despite indications of vessel cancellations and delays, analysts said.