Update (Jan 14) – The Baltic Dry Index fell for a seventh straight day Thursday, down 11 factors, or 2.79 %, at 383 factors. The capesize, panamax and handysize indices additionally touched report lows.

By Jonathan Saul

LONDON, Jan 13 (Reuters) – The Baltic Exchange’s primary sea freight index, monitoring charges for ships carrying industrial commodities, slumped to an all-time low on Wednesday as gloom over international demand and too many ships for rent continued to batter prospects.

The total index, which gauges the price of transport dry bulk cargoes together with iron ore, cement, grain, coal and fertiliser, was down 8 factors, or 1.99 %, at 394 factors – beneath 400 factors for the primary time – and the bottom stage in data that date again to January 1985.

“Dry bulk shipping is in the throws of a generational recession,” mentioned Ben Nolan of brokerage and funding financial institution Stifel. “The recovery in demand no longer appears to be a 2016 event and even 2017 is in question.”

Financial markets have been in turmoil for the reason that begin of the yr attributable to worries over the well being of the world financial system, China’s funds and the fallout from low oil costs.

The dry bulk sector has been notably damage by slower Chinese enterprise at a time when the sector is fighting large overcapacity.

“More gloom is forecast for the bulker market over the short-term. Concerns over the state of China’s economy are key,” consultants MSI mentioned, including the sector was in a “critical state”.

Analysts have downgraded a number of dry bulk corporations in current days main some to see report falls of their share costs. Industry gamers say solely the strongest companies will face up to the stress, with casualties anticipated.

“Dry bulk companies had taken huge debt to finance vessel acquisitions with some hope for revival in the sector. However, this has backfired as shipowners are unable to meet even their operating expenses at the prevailing freight rates, forget about servicing debt,” consultants Drewry mentioned.

The dry bulk transport downturn started in 2008, after the onset of the monetary disaster, and has worsened considerably in current months because the Chinese financial system has slowed, that means much less urge for food for iron ore and coal.

The capesize index, shed 21 factors, or 7.89 %, to 245 factors on Wednesday. Average day by day earnings for capesizes dropped $160 to a report low of $3,101.

Capesizes usually transport 150,000-tonne cargoes comparable to iron ore and coal and have been notably affected by a fall-off in coal demand from China. (Editing by Mark Potter)

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