Ocean freight rates for dry commodities on major Asian routes hit a seven-month low on Tuesday, with fewer raw commodity cargoes seen in the market.
The London Baltic Exchange's main price index, which tracks benchmark trading routes world-wide for commodities such as iron ore, cement, grains and sugar, fell about 2.3 percent from the previous week to settle at 9,992 points on Monday.
"There is some excess tonnage in the market now, which is seasonal, because this is the limbo period. We are outside the high peak season for grain, and the main load now is coal and iron ore shipments, and there aren't many issues there," a shipbroker said.
Period charter rates for modern Panamax plying the trans-Pacific were valued at $72,000, about 25 percent lower from month-ago levels, and broadly unchanged from week-ago rates. But rates remain well over the year's low of $30,592.
"It's important to look at where the low was this year, it keeps into perspective how all those shipowners are moaning about how the market is so bad. I'd say this has been a really good year for everyone," a Hong Kong shipbroker said.
China and India's voracious appetite for raw materials, along with higher than normal disruptions and congestion at key coal export terminals have helped to prop freight rates this year.
For the first 11-months of the year China's iron ore imports totalled 349 million tonnes, up 17.3 percent year-on-year. According to a Reuters calculation, iron ore imports in November stood at 35.25 million tonnes, the highest since March.
"We shouldn't expect to see rates drop off much further, we may get some sluggishness because of the holidays, but my guess this is the bottom, next year is going to be very much the same, unless there is a major turn in global economic health," a shipbroker said. The Baltic Exchange's Panamax Index settled at 9,715 points about 20 percent lower from the year's high of 11,713 points hit on October 30, but still well above the year's low of 3,923 points.
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