Baltic Dry Index Breaks 700 Mark for Third Time Since April

by Ship & Bunker News Team
Thursday August 25, 2016

The Baltic Dry Index (BDI) has broke the 700 mark for the third time since April, gaining 14 points to reach 706 Wednesday, and another 12 points to settle at 718 Thursday.

The latest gains come as the BDI continues its roller coaster since returning from a record low of 290 in February.

In terms of spot average TC rates, earnings in the Capesize segment grew to $6,826 per day (+$366) on Thursday, while Panamax earnings declined to $5,598 per day (-$53), and Supramax earnings rose to $7,445 per day (+$66)

In terms of market outlook, Maritime Strategies International (MSI) has said that improving iron ore, coal, and grain trades will likely see an increase in chartering activity within the Capesize and Panamax segments during 2016's fourth quarter, but notes that such effects may be limited.

"Contrary to recent reports, vessel movements data shows that Roy Hill’s new iron ore operation in Western Australia is ramping up more quickly than expected and should reach just below its maximum capacity by December," Will Fray, Senior Analyst at MSI said earlier this month.

"Seasonal coal trade should also provide some support for Capesize shipments into China. We continue to forecast Capesize spot rates over USD 10 k/day in October, but rates will most likely drop early in the new year on seasonal trade weakness."

MSI says it predicts that average spot earnings for modern Capesize vessels will reach $10,400 by October 2016.

In February, Ship & Bunker reported that industry players had once again voiced opinion that scrapping - rather than layups or slashing newbuild orders - is the dry bulk market's only hope for meaningful recovery.