Baltic Index falls as demand falters across vessels amid trade war

LONDON : The Baltic Exchange’s Dry Bulk Sea Freight index on Wednesday fell for the thirteenth straight session to a more than one-month low due to lower demand across vessels amid a global trade war.

The main index, which monitors rates for capesize, panamax and supramax shipping vessels, dropped 83 points, or 6.2%, to 1,259, its lowest since March 5.

The capesize index dropped to 1,732, its lowest level in six weeks.

Average daily earnings for capesize vessels, which typically transport 150,000-ton cargoes such as iron ore and coal, decreased $1,514 to $14,367.

A combination of low demand from commodities, mainly coal transported to China, iron ore and also grains is weighing down on earnings, said Yiannis Parganas, head of Intermodal’s research department.

Investors are dumping U.S. assets they usually favour in times of turmoil as fear over the economic impact of U.S. President Donald Trump’s reciprocal tariffs shakes confidence in traditional safe havens.

China is the largest importer of both coal and iron ore, which is used in its massive steel production industry.

“With U.S. port fees proposal, it will potentially make charterists avoid the U.S. regions at the moment,” Parganas added.

Trump’s administration is considering softening its proposed fee on China-linked ships visiting U.S. ports after widespread negative feedback from industries that said the idea could be economically devastating.

The panamax index shed 75 points, or 5.9%, to 1,203, lowest since March 12.

Average daily earnings for panamax vessels, which usually carry 60,000-70,000 tons of coal or grain, was down $677 at $10,824.

Among smaller vessels, the supramax index fell to a nearly one-month low, shedding 6 points, or 0.6%, to 948.
Source: Reuters