London: The Baltic Dry Index posted a third consecutive drop on falling rates to haul coal and iron ore for making steel.
The index fell 62 points, or 3.2 percent, to 1,846 points, according to the Baltic Exchange.
"A painful downturn is expected for Chinese steel prices and consumption after a short-term lift," Joel Crane, a New York-based Deutsche Bank AG analyst, said in a report dated February 13. That will damp freight rates, he said.
The index has dropped 10 percent since February 11, ending a run of 17 straight gains that caused the gauge to more than double.
Daily capesize rates, which fell below operating costs in December, dropped 6.2 percent to $31,370 yesterday. Panamax rentals slid 4.6 percent to $10,688 a day. Operating costs are $6,500 for capesizes and $5,000 for panamaxes, according to Erik Nikolai Stavseth, an analyst at shipbroker Lorentzen & Stemoco in Oslo.
Capesize forward freight agreements, derivatives used by traders to bet on future shipping rates, fell 4 percent to $27,250 a day for the second quarter as of 4:37 p.m. in Oslo. Panamax futures declined 1.9 percent to $13,750 for the same period. The data are from broker Imarex NOS ASA. [17/02/09]
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