The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying industrial commodities, slipped below 300 points on Thursday, to an all-time low.
The overall index, which gauges the cost of shipping dry bulk including iron ore, cement, grain, coal and fertiliser, fell five points or 1.65 percent to 298 points.
The index is yet to register a single session of gains this year, tumbling over 37 percent and touching fresh lows in 22 of the 24 sessions.
A slowdown in the Chinese economy, which grew at its slowest pace in a quarter of a century in 2015, and a huge over-capacity in vessels has hit the index hard.
“Part of the problem on demand side is that we are in a negative commodity inventory cycle…And that creates very tough conditions for shipping,” said Frode Morkedal, Managing director at ship brokerage firm Clarksons Platou Securities.
Morkedal said it will take sometime for shipping activity to bounce back given the slack in activity due to unsustainable operating rates that has resulted in several ships being idled.
However, lack of orders for new ships and encouraging scrap activity, will result in the fleet growth going down, he added.
The capesize index fell one point to 208 points.
Average daily earnings for capesize vessels, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $32 to $2,743.
Freight rates for capesize bulk carriers on key Asian routes should remain flat next week as the Lunar New Year holiday in China will curtail chartering activity, shipbrokers said on Thursday.
The panamax index rose five points at 289 points.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, rose $39 to $2,314.
(Reporting by Vijaykumar Vedala and Nallur Sethuraman in Bengaluru; Editing by Greg Mahlich)