The downward slide of dry bulk freight rates continued through May, with the BDI falling below 3,000 points by early June. The sharpest falls have occurred in the Capesize sector, with average earnings for Baltic-type tonnage falling from over $60,000/day at the start of May to less than $30,000/day by mid-June. This represents the lowest level since July 2003 and has occurred against a background of rapidly falling steel prices. The slowdown in demand for steel has caused some European and US steel mills to announce near-term cuts in production in an attempt to halt the slide in prices, reducing shipping demand for both steelmaking raw materials and steel products. In addition, some Far East producers have reportedly deferred contract shipments of iron ore (see page 6).
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