The BDI (Baltic Dry Index) has been both up and down in a seemingly endless series of economic rollers.
Seasick. It is hard to follow the Baltic Dry Index (BDI) without a packet of Dramamine nearby. The BDI (at this writing) had just dropped another 39 points to 1,073, to fall to the lowest level in over a month. The composite index (Capesize, Panamax, Supramax and Handysize) for dry bulk carriers can make anyone queasy.
Are we to be optimistic because at 1,073, the BDI this May is appreciably higher than the bumpy flirts with sub 600 points a year ago? After all, year-on-year that’s a 57.33% improvement and even on year-to-date, 11.65% to the good. Or should we feel uneasy that despite vessel scrapping and a significant reduction in the bulk carrier orderbook, the BDI hasn’t risen with any consistency.
It is hard not to remember that there was another May not so long ago - May 2008 -when the BDI hit 11,783 points before the descent into the abyss and a February 2009 BDI nadir of 291points.
But as the 2008-2009 period so amply illustrated with both the high and the low, global economics – commodity demand - and ocean borne commerce are closely linked. At its very essence, it is simply the supply and demand equation that sends the BDI soaring, crashing or as is the case at the moment, bumping along.
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