LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities fell to below 800 points on Thursday, which marks the eighth-straight session of declines as shipping activity has quieted for the winter lull period, somewhat more quickly than expected.

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 by another 4 points to 798 points on Thursday.

While data suggests demand for the major raw materials that drive the BDI’s value, iron ore and coal remain strong particularly from top consumer China; the glut of ships is underpinning hire rates and preventing the BDI from continuing its summer rally into fall and winter.

The oversupply of ships is a major structural challenge and is preventing the BDI from trading consistently higher.

Unfortunately, ship-scrapping rates have not been high enough to reduce the oversupply of ships and for the near term this factor will continue to pressure the BDI. The BDI’s highest value to date was 11,793 points, reached in May 2008.