Rents for capesize ships that haul iron ore fell to the lowest level in six weeks on excess vessel supply.
Hire rates dropped 2.9 percent to $6,655 today, according to data from the Baltic Exchange in London. That’s the lowest since March 7 and the 11th straight decline. Rentals fell 36 percent in the three weeks to April 15.
“Ship supply continues to outpace demand for most asset classes,” Jonas Advocaat Kraft, an analyst with Pareto Securities AS in Oslo, said in a note today.
The carrying capacity of the fleet of ships to haul commodities such as coal, iron ore and grains will expand 13 percent this year, compared with a six percent increase in demand, according to forecasts from London-based Clarkson Plc.
Companies ordered too many ships in 2007 and 2008, when the Baltic Dry index, a measure of commodity shipping costs, averaged 6,730 points. The index then plunged 60 percent during the next two years, according to the exchange. The gauge fell 0.9 percent to 1,284 points today, a 15th straight drop.
Daily rents for supramax ships, used on routes including carrying Indian iron ore to China, slipped 0.4 percent to $14,729. Panamax vessels, the second-biggest tracked by the index after capesizes, declined 1.6 percent to $11,934 and handysizes were little changed at $11,928.