UNITED KINGDOM January 05 2017 2:34 PM
LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities advanced on Wednesday mainly due to higher cape rate.
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, gained by 16 points to 969 points on Wednesday.
The BDI has descended since reaching its mid-November peak of 1,261 points but it is much higher than its 2016 low of 290 points.
Looking forward, cautious optimism remains when it comes to the BDI’s prospects for 2017. The majority of market participants believe that the worst is over for the BDI, but there are doubts over how much higher the BDI can move given the oversupply of ships.
In order for the BDI to stay at its current levels zero growth is required in terms of available ships, but for the BDI to ascend further the number of ships available for hire has to decrease.