Baltic Dry Index Continues to Soar on Surging Capesize Rates

by Ship & Bunker News Team
Tuesday April 5, 2016

Buoyed by higher Capesize rates, the Baltic Dry Index (BDI) rose a further 21 points Monday to reach 471, the joint highest single day gain of the year following a similar 21 point jump last Friday to make it a gain of 57 points (13.8 percent) over the last three sessions.

Average TC spot rates in the Capesize segment Monday grew by $499 to reach average daily earnings of $3,512 per day.

Both Panamax and Supramax segments were also up Monday, reaching earnings of $4,497 per day (+$22) and $5,004 per day (+$23), respectively.

The BDI's continued positive movement came following news on Thursday that Mitsui O.S.K. Lines, Ltd. (MOL), under a major restructing plan, will be eliminating 10 percent of their Capesize fleet and closing down the company's Singapore dry bulk shipping unit.

Commenting on the decision MOL stated "the Company deemed it necessary to conduct an urgent review of its business models due to the prolonged sluggish dry bulker market, and decided to implement a major scale-down of the fleet to minimise its market exposure by free vessels, dissolve MOLBC, and transfer its business operations from Singapore to Tokyo."

MOL says it will reduce its surplus dry bulk tonnage through the cancellation of charter-in contract and selling some ships, gleaning a 10 percent reduction in its Capesize fleet.

On Friday, industry experts told market participants not to be fooled by the surge, warning against placing too much optimism on there being a meaningful recovery.

Ship & Bunker News Team
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