The Baltic Dry Index Retreated With Weakening Capsize

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  • The Baltic Dry Index faced headwinds.
  • Copper experienced a modest 0.7% rise.
  • The Baltic Dry Index retreated by 3.0%.

The Baltic Dry Index faced headwinds, particularly for capsizes, with base metals and iron ore emerging as winners. Crude oil prices remained relatively stable, while European natural gas markets showed limited changes. Iron prices were supported by expectations of further Chinese economic support, reports Break Wave Advisors.

Metals and Mining

Base metals closed in the black, led by a 3.2% gain in three-month aluminum futures on the LME.

Copper experienced a modest 0.7% rise, influenced by global supply concerns.

Grain Futures on CBOT

Grain futures on the CBOT had an uneventful session, with March wheat closing unchanged and soybean futures gaining 1.2% amid Brazilian harvest concerns.

Freight and Bunker Markets Overview

The Baltic Dry Index retreated by 3.0%, driven by weakness for capesizes, while panamaxes continued to rise.

Wet freight gauges saw adverse developments, with dirty tanker and LNG indices declining, but clean tankers surged by 16.1%.

Bunker fuel trading had a mixed session, with VLSFO declining in Singapore but gaining in Houston and Rotterdam.

China’s Economic Concerns

The People’s Bank of China’s decision to lower the required reserve ratio indicates concerns over sluggish growth.

Last year’s economic growth met the official target, but the leadership remains wary, evident in the cautious approach to the reserve ratio adjustment.

Industrial production in December exceeded expectations, but uncertainty over Chinese demand impacts copper prices.

Copper as an Economic Indicator

Copper, often viewed as a bellwether for economic activities, has seen recent price increases but remains below year-end levels.

Cargo order volumes for copper in Chinese ports suggest a potential month-on-month increase, but concerns about subdued growth persist.

The data for the red metal indicates a possibly restrained Chinese growth in the early months of the year.

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Source: Break Wave Advisors

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