Main sea freight index at Baltic Exchange continues to decline to 579 points

UNITED KINGDOM May 12 2016 2:18 PM

LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities continued to decline on Wednesday as China’s moves to curb the speculation in many commodities including iron ore and steel are taking effect, with the prices of these commodities seeing hefty declines.

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 15 point to 579 points on Wednesday.

The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on February 10 2016, when the index plummeted to 290 points.

The BDI staged a steady recovery since February, when it hit a record low of 290 points with the index easily doubling in mere months as China moved to restock some raw materials, while at the same time sentiment over the health of the global economic improved. The rally of some commodities was so aggressive that it prompted exchanges in China to increase trading requirements to prevent a bubble market.