Weaker Capesize demand drags down the Baltic index

The Baltic Exchange's main sea freight index fell on Monday as demand for Capesize vessels weakened.

The main index dropped 22 points, or 1.1 per cent, to 2,022 points, reaching its lowest point since August 12.

The Capesize index fell 83 points, or 2.5 per cent, to 3,212 points, its lowest level since August 7. Average daily earnings for Capesize vessels decreased by $685 to $26,638.

Iron ore futures erased earlier gains to trade lower, weighed by rising inventory and looming demand concerns sparked by talks of production control in top consumer China.

Steelmakers in key Chinese steel production hub Tangshan were rumoured to have received oral instructions to cut output from August 31 to September 3 to improve air quality in Beijing. However, Reuters could not verify the authenticity of the production restriction.

The Panamax index added eight points, or 0.5 per cent, to 1,630. Average daily earnings for Panamax vessels was up $72 to $14,673.

Among smaller vessels, the supramax index gained eight points, or 0.6 per cent, to 1,361.

(Reporting by Sarah Qureshi in Bengaluru; Editing by Leroy Leo)