Baltic Dry Index Breaks 700 for the First Time Since November 2015

The Baltic Dry Index gained 14 points Tuesday to reach 704, the highest the index has been since November 2, 2015.

The Baltic Dry Index (BDI) gained 14 points Tuesday to reach 704, the highest the index has been, and the first time it has sat over 700 since November 2, 2015.

Average Spot TC rates in the Capesize segment jumped $513 Tuesday to reach earnings of $8,789 per day.

The Supramax segment also experienced a rise, gaining $27 to reach earnings of $5,899 per day, while average spot TC rates in the Panamax segment fell $66 to land at $5,729 per day.

Freight Investor Services (FIS), commenting on the BDI's recent gains, said: "the fact that the recovery of the dry bulk market is more akin to the patient sitting up and talking than a Lazarus-like leap out of bed has been somewhat overlooked in the wave of enthusiasm."

FIS says that timing and longevity are the key concerns in the dry bulk market's recovery, noting that recent gains toward an apparent recovery has largely been propped up by iron ore prices and a rise in both steel prices and production in China.

George Lazaridis, Head of Market Research & Asset Valuations at Allied Shipbroking Inc, says that, while dry bulk rates may be on an upward trend, commodity demand remains uncertain.

"For the time being, the major concern continues to be the present lag in demand for most commodities, reflected both in the glut of supplies available in the market, as well as the poor performance of the dry bulk freight market whose carrying capacity is still in excess to what can be fully utilised," said Lazaridis.

Earlier this month, Ship & Bunker reported that industry experts were warning market participants not to place too much optimism on there being a meaningful recovery in the dry bulk industry.