Baltic index at over 10-mth high, more gains seen

Wed Oct 12, 2011 5:47pm GMT
 

* Capesize earnings at over 10-month high

* Fleet growth adding to market headwinds

By Jonathan Saul

LONDON, Oct 12 (Reuters) - The Baltic Exchange's main sea freight index , which tracks rates to ship dry commodities, rose to its highest in over ten months on Wednesday helped by buoyant cargo demand.

Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds.

The overall index rose 21 points or 1.0 percent to 2,127 points in a sixth straight session of gains and was at its highest since Dec. 8, 2010. Prior to the move higher last week, it had fallen for six previous sessions.

Broker Fearnleys said cargo fixtures by big mining groups had helped drive upside momentum on the capepsize market.

"The (capesize) index has kept pace with the market and has risen over 14 percent for the week to 3,486 (points)," Fearnleys said on Wednesday.

The recent dry freight market rally had been driven by firmer coal and iron exports from Australia and Brazil to China, which boosted the larger capesize market. Coal imports into Japan have also picked up.   Continued...

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