World News
Dry Bulk "Has Gone Bananas" Says Analyst, as Baltic Dry Index Surges to New 23 Month High
Having broken the 1,000 point mark only a week ago, the Baltic Dry Index (BDI) gained 86 points Thursday to reach a new 23-month high of 1,231.
This is the highest the index has been since it sat at 1,239 on November 26, 2014.
All key segments saw big gains Thursday, particularly the Capesize segment, where average spot TC rates jumped $2,016 to earnings of $19,515 per day.
Meanwhile Panamax earnings swelled $720 to $10,795 per day, and Supramax grew $270 to earnings of $7,818 per day.
The BDI, which has clawed its way back from all-time record lows of 290 last February, has recently been on an upward march, gaining 397 points over a two-week period of straight gains.
The surge has been attributed to a increase in demand, a trend some market participants see as continuing; "Best of all; there is still potential for future improvement," Fearnleys said of the Capesize market.
The unlikely US election victory for Donald Trump earlier this month also contributed to positive sentiment within the sector; his talk of plans to tear up trade agreements and bring about a coal revival was attributed to an incredible surge for DryShips Inc. [NASDAQ:DRYS] who saw it's share price jump from under $5 last Thursday to almost $100 earlier this week.
"The dry bulk shipping sector evidently has gone bananas since Trump was elected last week," said J.P. Morgan analyst Noah Parquette.
Cooler heads appear to have prevailed since then; the stock plummeted Thursday to close the day at $11.
Still, the outlook remains positive, and as Ship & Bunker reported last week, Drewry Shipping Consultants Limited (Drewry) says that over the next five years, it expects Capesize one-year time charter rates to double from current 2016 lows.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 501.00 | 6.00 | 598.50 | 7.00 |
| Rotterdam | 442.00 | 4.00 | 590.50 | 1.00 |
| Houston | 445.00 | 7.50 | 591.00 | 4.50 |
| Fujairah | 493.00 | 9.00 | 708.50 | 10.50 |
| Global 20 Ports Average | 518.50 | 3.50 | 695.50 | 3.00 |
| Global 4 Ports Average | 470.00 | 4.50 | 622.00 | 5.00 |
| Global Average Bunker Price | 561.50 | 3.00 | 745.50 | 1.50 |
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