Baltic Dry Index Stages Strong Rebound

The Baltic Dry Index had an incredible last week.

And there isn't much 'news'. On Steel Guru.

• Dry bulk market on the rise - Analyst view
  
  Saturday, 10 Oct 2009
  
  In what could prove the beginning of a new and sustainable rally for the dry bulk market, the Baltic Dry Index has posted its biggest increase in more than two months, jumping by 4.3% on a daily basis. It now stands at 2,546 points, with all of the submarkets increasing.
  
  But, the star of the show was undoubtedly the battered Capsize market, which managed to rise by 245 points at 3,773, where the relative Baltic Capsize Index now stands. As for freight rates they have risen at USD 37,049 for an average daily time charter.
  
  Just a few days ago, Mr Kong Fanhua senior researcher of China Ocean Shipping Group had been quoted as saying that "If you believe in a China story, believe in a recovery in the shipping market."
  
  He maintained that by the end of the year the Baltic Dry Index, the main measure of shipping costs for commodities, could surge by more than 80% to return to the 4,000 point level, triggered by increased demand for commodities from China. This rebound would be fuelled by the fact that local governments encourage factory output, especially of steel.
  
  Mr Kong echoed the view by Mr Glenn Maguire, chief Asia Pacific economist with Societe Generale SA, who said earlier this month that China’s inland projects to build more roads, railways and warehouses will continue to fuel demand for commodities. China's gross domestic product grew 7.9% in the second quarter, up from 6.1% in the three months through March. GDP growth slowed to 9% last year from 13% in 2007.

Cosco's comments were highlighted in an earlier blog posting: Baltic Dry Index May Surge More Than 80 Percent!