Econintersect: The widely watched Baltic Dry Index (BDIY) hit a three-year high of 2,237 on Wednesday (10 December 2013). The BDIY provides a measure of the level of demand and cost for shipping bulk dry commodities and raw materials such as coal, metals, food, etc. The index was at 700 at the start of the year and stayed below 1000 until near the end of June. The sharp rise in the second half of the year is considered a sign of increased global economic activity.
Although readings over 2,000 were relatively rare before 2003, there were much higher readings 2003-2010. See graph from Hofstra University.
Analysts indicate that there is some seasonality n the increase in BDIY and worries that the surge mught slow down. From the Financial Times:
Shipping analysts were cautious over hopes of a sustained upturn, noting that some of the drivers behind the uptick in rates were related to the time of year.
There were also indications that the high rate of deliveries of new vessels in a market already suffering from overcapacity is slowing down, they argued.
Sources:
- Baltic Dry Index (Bloomberg Markets, 10 December 2013)
- Shipping benchmark hits three-year high (Mark Odell, Financial Times, 10 December 2013)
- Baltic Dry Index (Wikipedia)
- The Baltic Dry Index, 1985-2013 (The Geography of Transport Systems, Hofstra University, not dated)
