CHINA November 08 2016 1:32 PM

LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities continued to advance to 870 points on Monday 

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, up by another 15 points to 870 points on Monday. 

Last week, while the Baltic Dry Index oscillated, week-over-week the index is up 13 points. The Baltic Dry Index ran into some challenges in mid-fall and on October 27 fell to 798 points after a few sell-offs.

The key factors that have been supporting the BDI have been China’s increased appetite for iron ore and coal, while downside pressures have come from the oversupply of ships. There is little that can be done in the immediate term to reduce the ship oversupply; therefore, demand for iron ore and coal this winter will dictate the BDI’s value.