Thursday, December 23, 2010

The Baltic Dry Index (BDI) Is Not Too Happening

It has been a real long time since I blogged on the Baltic Dry Index.

The BDI last closed at 1830!

It's now to happening.

Some recent commentary:

  • The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry’s benchmark has been falling this week, with the Baltic Dry Index (BDI) retreating yesterday to 1,886 points, close to its 2010 lowest. Both the capesize and the panamax segments were among the main losing sectors yesterday. During the course of the previous week, the Baltic Capesize Index managed to put a halt in its demise, by posting a marginal increase of 1% on a weekly basis. According to a weekly report from shipbroker Barry Rogliano Salles (BRS), the improvement was mainly due to a surge in demand from the big miners in the Pacific in the later part of the week. However the Capesize 4TC is now hovering around US$25,000 per day, the lowest point since the summer and well down on the average for the year. In India, Karnataka ore sellers will have to wait until mid January to hear a decision on their bid to overturn the state’s export ban. This week India’s top court gave the state additional time to respond to the miners’ legal petition. The Federation of Indian Mineral Industries has already estimated the ban will reduce India’s ore exports by 38% to 66m tons in 2010. The Karnataka High Court earlier upheld the provincial government’s decision to halt shipments overseas” said BRS. (source: here )

Shipping stocks fall...

  • Shipping stocks on the Indian bourses have lost between 11 and 23 per cent in the last one month as Baltic Dry index slumped to a four-month low. Overcapacity because of new vessels and expectation of fleet additions plunged the Baltic Dry Index, barometer of shipping business, to a four-month low of 1,955 points, down 2.2 per cent (44 points) from its previous close. (source: here )

Excess blamed...

  • The Baltic Dry Index, a measure of commodity-shipping costs, fell to the lowest level in more than four months on a surplus of ships.

    The index declined 19 points, or 0.9 percent, to 2,076 today, according to data from the Baltic Exchange in London. That’s the lowest since Aug. 6. Declines were led by rates to hire capsesize ships, the biggest in the gauge. They fell 2.1 percent to $24,852 a day.

    “The dry bulk market is showing no signs of improvement,” Shalini Shekhawat, a Gurgaon, India-based analyst at Drewry Shipping Consultants Ltd., wrote in a report. “The remainder of the year will be no better, with iron ore and grain trade being insufficient to absorb the over-supply of tonnage in the market.”

    Shipping rates have fallen 31 percent this year as new vessels entered the fleet. Capesizes will expand 24 percent in 2010, driving overall dry-bulk fleet growth of 17 percent, Clarkson Plc, the world’s largest shipbroker, estimates. Demand will grow 10 percent over the same time, Clarkson said. Capesizes mostly carry iron ore, used to make steel.

    Source: here

Past postings on BDI: here