Baltic Dry Index Rises Above 300, But Bleak Market Conditions Predicted for Next Six Months

The Baltic Dry Index (BDI) rose six points to reach 301 Tuesday, marking the third consecutive day of positive movement for the Index.

Alongside news that Maritime Strategies International's(MSI's) Dry Bulk Freight Forecaster offered a bleak outlook for the market's next six months, the Baltic Dry Index (BDI) rose six points to reach 301 Tuesday, marking the third consecutive day of positive moves for the index.

Spot average TC rates rose across the board, with Capesize daily earnings rising $84 to $2,805 per day, Panamax earnings swelling $95 to $2,772 per day, and Supramax gaining $58 dollars to settle at $2,638 per day.

The handysize index was also reported to be up one point, reaching 184 points.

"Without a recovery in coal trade this year, it is unlikely that spot rates will reach double figures for any bulker benchmark over the next six months, even Capesize vessels," said Will Fray, Senior Analyst for MSI.

MSI says positive news for dry bulk's outlook will stem from demand precipitated from expected strong Latin American grain exports, with the International Grains Council forecasting a 14 percent increase in the 2015/16 crop year, compared to the 2014/2015 year.

The impact of the strong grain exports on the dry bulk industry is expected to be concentrated in the year's second quarter, says MSI, noting that increased port congestion will be a likely side effect of the increased grain trade.

MSI further notes an expected delay in the removal of about 1.5 to 2 million tonnes of short-haul bauxite exports per month out of Malaysia, due to a three month mining ban in the country.

MSI has forecasted Supramax spot rates of $6,000 per day in July, compared to current July contracts in the FFA market of $4,900 per day.

On Friday, Ship & Bunker reported that the BDI rose 1 point to reach 291, the index's first positive movement in the 2016 year.