Baltic Dry Index Breaks Above 1500 for the First Time in Over Three Years

The Baltic Dry Index gained 32 points today to reach 1502.
Image Credit: Vancouver Fraser Port Authority

The Baltic Dry Index (BDI) gained 32 points today to reach 1502 - the first time the index has been above 1500 since April 24, 2014.

Average spot TC rates were up in both the Capesize and Supramax segments today, reaching earnings of $22,392 per day (+$1,067) and $10,723 per day (+$60), respectively.

Meanwhile average spot TC rates in the Panamax segment dropped to earnings of $12,006 per day (-$164).

However, while the BDI has been gathering steam, data from VesselsValue indicates that so too have newbuilding orders - offering a possible threat to the dry bulk market's recent display of strength, Seatrade Maritime News reports.

"If too many people order and the market is flooded with vessels, rates will never recover, and we will be left with too many vessels and too few cargoes: the classic supply and demand imbalance in shipping," ," said VesselsValue Associate Director Claudia Norrgren.

According to VesselsValue, 110 vessels were ordered in the first six months of 2017, compared to just 63 during the same period of 2016.

"As typically happens when values and rates drop, newbuild ordering also slowed down. This happened over 2016 and the first half of 2017," said Norrgren.

"However since we entered into the second half of this year, owners have ramped up drybulk ordering (and) interestingly, the main protagonists are Japanese."

In January, Ship & Bunker reported that New York-based shipping analysts, as well as industry executives, were suggesting that dry bulk rates were bound to see moderate improvement this year, leading to more substantial gains in 2018.