Baltic Dry Index Falls for First Time in Over a Month on Fragile Capesize Segment

Average spot TC rates in the Capesize segment fell $279 to land at earnings of $7,745 per day Wednesday as the Baltic Dry Index fell two points to reach 669.

Fragile Capesize rates contributed to the Baltic Dry Index's (BDI's) first decline since March 16, as it fell two points Wednesday to reach 669.

Average spot TC rates in the Capesize segment fell $279 to $7,745 per day Wednesday, while the Panamax segment rose $1 to reach earnings of $5,948 per day, and Supramax gained $98 to reach earnings of $5,678 per day.

Will Fray, Senior Analyst at MSI Ltd., says that in order for the BDI's recent gains to continue, the Capesize segment will need to witness a sustained recovery in China's steel exports and coal imports, World Maritime News reports.

Meanwhile James a'Beckett, Braemar ACM Shipbroking's head of dry cargo broking, Wednsday said that if the dry bulk shipping market has any hope of recovery by 2018, there will first need to be a market restructure.

"The market needs to restructure itself and you are going to see that with operators. I do think that the Japanese investment model of investor goes to a bank, borrows money, then builds a ship and puts that on long term charter to one of the major operators – that model needs to be reviewed," a'Beckett was quoted by Seatrade Maritime as saying.

"We're going to see vessel control going back to the head owners and back to the banks. Obviously there's a huge amount debt associated with that and the banks have kicked that down the road and that's the critical thing, and that's got to change."

Further, Denis Petrpoulos, president of Braemar Group Asia, says that rates must first return to OPEX before banks become more demanding in trying to secure repayment from carriers.

Last week, Ship & Bunker reported that, despite an unclear market outlook, Luciana Salles, principal trade analyst at IHS Maritime & Trade, says it is possible that 2018 could mark the beginning of a more balanced market.