LONDON Jan 5 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, continued a slide that began before Christmas due to weak demand for coal and iron ore freight and growing vessel supply.
The index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, fell 126 points or 8.12 percent to 1,426 points.
Spot coal buying in Asia has been limited for the past two months in the case of China and for most of the past year for India.
Ship owners in the Atlantic are increasingly willing to sail empty on outward journeys because of a scarcity of fronthaul cargoes.
Panamax activity in the Pacific picked up after a slow start to the week, but the Atlantic market remained quiet, and sentiment and rates there have fallen as a result.
"We noticed a good amount of fresh stems entering the market (in the Pacific), but this was outweighed by the substantial amount of prompt tonnage still available in the basin," broker ICAP said in its dry bulk shipping report.
The handysize market in the Black Sea and Eastern Mediterranean remained flat, ICAP said, and cargoes were thin on the ground.
The Baltic's capesize index fell by 610.73 percent to 2,471 points. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.
The Baltic's panamax index fell 1.75 percent.
Ship brokers and analysts said in December they expected a steady decline in prices in January during a typically slow period early in the year combined with weak fundamentals.
The shipping sector faces a supply glut combined with a slowing economy, including concerns over the outlook for Chinese demand for raw materials, which is likely to hurt demand.