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Baltic index dips to near 1-year low on seasonal weakness

Jan 22 (Reuters) – The Baltic Exchange’s main sea freight index fell to its lowest since February on Wednesday, hurt by a seasonal slowdown in demand amid higher costs for shipowners due to a new regulation for shipping fuels.

* The Baltic index, which tracks rates for capesize, panamax and supramax vessels ferrying dry bulk commodities, fell 66 points, or 9.6%, to 623.

* The capesize index slipped 170 points, or 34.3%, to 325.

* The capesize index registered its 29th consecutive session of losses, touching its lowest level since April last year.

* Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes including iron ore and coal, dropped $1,151 to $5,911.

* “Fuel is getting much more expensive so ship-owners are struggling to make profit due to increased costs under the new International Maritime 2020 regulations,” said Jo Ringheim, equity research analyst at Arctic Securities.

* Tougher rules on sulphur emissions from ships came into effect in January, in the biggest shake-up for the oil and shipping industries for decades.

* “We are heading into a softer seasonal period of the year with lower iron ore trade,” Ringheim said, adding the Chinese new year holidays could also dent demand.

* The panamax index fell 64 points, or 7.8%, to 760.

* Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, declined $574 to $6,844.

* The supramax index fell by 6 points to 550 points. (Reporting by Anjishnu Mondal in Bengaluru; Editing by Aditya Soni)

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