MFAME has been covering up on this topic monitoring the Baltic index trend and you will be surprised to know that the BDI has reached levels which is alarming.
If you are interested to know the reasons and more information on the Baltic index – read here on our exclusive coverage about the BDI
The Chinese New Year has just passed and the world is looking at China to improve on its global trade. The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, continued its nosedive on Tuesday to touch another record low as slowing activity, especially from China, took its toll.
The Baltic dry index, which posted its record high of 11,793 points on May 20, 2008, has slumped to 291 points, marking the lowest level since the Baltic records began in January 1985. The index has yet to post a single session of gain this year and has tumbled nearly 40 percent, touching fresh lows in 25 of the 27 sessions thus far.
The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, fell 2 points to 291 points. The index is viewed by investors as an indicator of global industrial activity.
“China’s slowdown has had a dramatically negative impact on dry bulk, leading freight rates, asset values and forward expectations to all-time lows,” ship brokerage firm Clarksons Platou Securities said in a note on Tuesday.
The dry bulk market is expected to remain under pressure for longer because of weak demand for commodities, particularly from top global importer China. The capesize index remained unchanged at 207 points. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, dipped by $10 to $2,771.
The panamax index, for vessels that usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, was down by a single point at 297 points. Average daily earnings for panamaxes fell by $5 to $2,385. The supramax index slipped by 5 points to 250 points while the handysize index dropped 2 points to 188 points.
Source: Reuters (Reporting by Kevin Jose in Bengaluru; Editing by David Goodman)
