Lower demand pulls Baltic index down

The Baltic Exchange's main sea freight index fell on Monday as all vessel segments recorded losses.

The main index fell 31 points, or 1.4 per cent, to 2,226 points.

The Capesize index lost 55 points, or 1.4 per cent, to 3,774. Average daily earnings for Capesize vessels decreased $460 to $31,296.

Prices of key steelmaking ingredient iron ore also softened on Monday, as investors awaited clear cues from the upcoming high-level Politburo meeting in China and the fresh trade talks between the world's two largest economies.

The Panamax index slipped 40 points, or 2.2 per cent, to 1,798, its lowest level since July 10. Average daily earnings for Panamax vessels decreased by $360 to $16,180.

Among smaller vessels, the supramax index shed five points, or 0.4 per cent, to 1,289.

"Recent trade agreements between the US and major partners such as the EU and Japan are a big positive, in our view, in that they remove trade uncertainty and encourage more volumes," Jefferies analysts said in a note.

The US struck a framework trade agreement with the European Union on Sunday, imposing a 15 per cent import tariff on most EU goods - half the threatened rate - and averting a bigger trade war between the two allies that account for almost a third of global trade.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Shailesh Kuber)