Main sea freight index at Baltic Exchange continues to fall to 864 points
LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities continued to fall to 864 points on Monday, after the shipping index fell late last week after rallying to 937 points, its highest price point since December 2014.
The Baltic Dry Index, which provides an assessment of the price of moving the major raw materials – such as coal, iron ore and grain – by sea by taking in 23 shipping routes measured on a time charter basis, down further by 11 points to 864 points on Monday.
Evidence and history suggest that this could just be a quick retreat and that there could be more upside in store for the BDI before seasonality causes a sustainable demand in shipping activity and rates.
Historically, the BDI has seen its highest price point of the year in the October-December period as shipping activity picks up for winter restocking.
Chinese demand is a major component of this seasonal restocking and although going into the season there were concerns over the country’s demand, recent data has been optimistic.
China has continued to import large amounts of coal and iron ore, and this is supportive for the BDI. Coal restocking is typically ahead of winter heating season while a retreat in the price of iron ore, since its August peak, is also renewing demand.