Main sea freight index at Baltic Exchange drop to 922 points

UNITED KINGDOM January 18 2017 1:07 PM

LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities dropped on Tuesday mainly due to lower panamax and supramax rates.

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 03 points to 922 points on Tuesday.

According to analysts, many shipowners keep adding dry bulk carriers to their fleets, and this is a major dark cloud hanging over the market. Shipowners have taken the BDI’s fragile recovery as reason to add more boats to their fleet, a trend that is expected to continue. 

The companies are preparing for the BDI to recover before adding their boats into service, but the question remains as to how long they will wait. If these boats are added to the global fleet prematurely, the BDI could experience a downward tailspin. 

While the index has staged a healthy recovery since falling to below 300 points last fall, it is still well off its record high of almost 12,000 points.