The Baltic Exchange’s main sea freight index, which tracks rates for ships ferrying dry bulk commodities, fell on Friday, marking its biggest quarterly decline in three years as the capesize index slumped to a record low on weak demand from top miners Brazil and Australia.
The Baltic index, which reflects rates for capesize, panamax and supramax shipping vessels, was down 3 points, or 0.4 percent, at 689 points and has fallen about 46 percent for the quarter.
The capesize index dropped 17 points, or 10.20 percent, to 150 points, an all-time low. Average daily earnings for capesizes, which typically transport 170,000 tonne-180,000 tonne cargoes such as iron ore and coal, fell $76 to $3,796.
“There is a lack of cargoes from Brazil after Vale’s mine closure and fixtures from Australia in the aftermath of cyclone Vernonica, which certainly has been depressing capesize index,” said Peter Sand, chief shipping analyst at BIMCO.
Production in Brazil has been hit by a disaster, which killed about 300 people in one of the largest mines run by Vale SA in January.
Tropical Cyclone Veronica pummelled iron ore export ports on the northern coast of Western Australia. Miners Rio Tinto, and BHP Group, halted operations at some facilities as two separate cyclones battered Australia’s northern coastline last week.
Shipments of iron ore account for about a third of seaborne volumes on the larger capesizes. Capesize index has lost nearly 1,600 points since the mine disaster in Brazil and shed more than 92 percent for the quarter, its biggest dip since at least 1999 as per data available with Refinitiv Eikon.
“We except much more hardship for capesize segment until there is more clarity and more exports out of Brazil and Australia,” Sand said.
Meanwhile, the panamax index gained 15 points, or 1.4 percent, to 1,102 points, its highest level since Jan. 15. The index has risen for second straight month, up about 36 percent in March.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, gained $113 to $8,813.
The panamax index has been supported by the ongoing South American grain export season, analysts said. The supramax index shed 10 points to 813 points.