Friday, May 22, 2009

Baltic Dry Index reaches 8 month high

Freight rates are back on the up.

UK - The Baltic Dry Index, the benchmark for freight costs for dry bulk commodities like iron ore, has reached a new high in 2009 rising to just over 2,700, a massive 250% rise this year.

The improvement is thought to be due to higher demand for Capesizes, the largest shipping vessels, transporting iron ore to China from destinations such as Brazil and Australia. Chinese steelmakers prefer to buy this better quality ore from foreign destinations as it is cheaper than using closer to home lesser quality Chinese ore.

The Baltic Dry Index is still far below last year's all-time high of 11,793 points.