Update (Wednesday, Jan 6) – The Baltic Dry Index fell once more on Wednesday, ending the day down one level, or 0.21 %, at 467 factors.

By Jonathan Saul

LONDON, Jan 5 (Reuters) – The Baltic Exchange’s important sea freight index, monitoring charges for ships carrying industrial commodities, slumped to an all-time low on Tuesday, as worries over demand from high importer China and large oversupply of vessels battered sentiment.

The general index, which gauges the price of delivery dry bulk cargoes together with iron ore, cement, grain, coal and fertiliser, was down 5 factors, or 1.06 %, at 468 factors, the bottom in data that date again to January 1985.

“The outlook is clearly very poor,” stated Tony Foster, of British delivery asset supervisor Marine Capital. “We believe it’s more a question of how long these currently terrible levels will last.”

Adding to the brand new yr gloom, world shares fell once more on Tuesday after their worst first-day efficiency in years, extending losses as aid at intervention by China to regular its markets rapidly evaporated within the face of mounting issues concerning the world economic system.

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

The capesize index, shed 10 factors, or 2.12 %, to 462 factors on Tuesday. Average each day earnings for capesizes dropped $135 to $4,676.

Capesizes sometimes transport 150,000-tonne cargoes resembling iron ore and coal.

The dry cargo delivery market has additionally been hit by a wave of ship deliveries, that are anticipated to proceed this yr.

“The lack of activity in rates shows how severe the overhang is,” stated Arctic Securities analyst Erik Nikolai Stavseth.

Analysts stated a lot increased scrapping of dry bulk ships was wanted to chop the scale of the fleet.

Deutsche Bank analyst Amit Mehrotra stated 90 capesize vessels had been scrapped in 2015 — the very best quantity in 30 years.

“But this is not enough in our view given supply growth of recent years,” Mehrotra stated.

“Overall scrappage accounted for only 3.5 percent of the total dry bulk fleet, 4.7 percent for capesize, which we view as modest given weak demand trends.”

(Editing by Louise Heavens)

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