Tuesday, September 29, 2009

Baltic Dry Shipping Index Down Further

China Uses up Her Stocks of Ore and Coal
Shipping News Feature

LONDON – The latest news from the City is of a further fall in the Baltic Dry Index closing last night at 2192 indicating that the larger markets for this type of cargo were “drawing breath”.

The BDI has traditionally been used by many as a barometer of the shipping world’s fortunes and to some extent this is true. The current situation however is different to any faced since the BDI’s inception in 1985, and the volatility of the index is easily affected by the new market conditions.

The effect of oversupply of the larger dry freight carriers and the fact that China may have ordered bulk materials, particularly iron ore, rather speculatively earlier in the year, has had a detrimental effect on the daily charter price and seen it dwindle from its June high of over 4 ¼ thousand to last nights low.

Tonnages of bulk goods are actually significantly up against last years totals, but potential oversupply of vessels, particularly the larger ships, pull down the rate and brings the one bright spot for the marine transport market back down to earth where it joins the truncated container market.

Bulk tanker carriage of “wet” goods, normally buoyed by the strong winter demand for fuels, is also facing a shrinking demand in an area where, once again, supply of carriers not only exceeds demand, but is set to increase should all the new vessels scheduled for delivery in the next year or so actually be built.