The Baltic Dry Index an index of global shipping costs for commodities and an indicator of global trade. Like any single indicator, it is not perfect, but along with falling commodity prices, it probably signals both a supply glut and falling demand. From Naomi Christi at bloomberg.com:
(Bloomberg) — A measure of global shipping costs for commodities fell to a 28-year low as slowing growth in China’s demand exacerbates the effect of a fleet glut.
The Baltic Dry Index plunged 5.1 percent to 632 points, the lowest since Aug. 22, 1986, according to data from the Baltic Exchange in London on Thursday. Freight rates for all the vessel types within the measure declined.China, the world’s biggest buyer of of coal and iron ore, will increase imports of the two commodities by 6 percent this year, down from a growth rate of 8.7 percent in 2014, according to estimates from Clarkson Plc, the world’s largest shipbroker. The nation’s economic expansion this year will be the weakest since 1990, the average of 67 economists’ forecasts compiled by Bloomberg shows.
“China is slowing down, that’s why,” Marc Pauchet, an analyst at Braemar ACM, a ship broker in London, said of demand for Capesize ships, the biggest tracked by the Baltic Exchange. “The cargoes are simply not there.”Day rates for Capesizes slid 6.7 percent to $5,972. The biggest drop was for Panamaxes, the largest to navigate the Panama Canal, which fell 11 percent to $4,392, according to the Baltic Exchange’s data on Thursday.
To continue reading: Baltic Dry Index
