UNITED STATES March 21 2017 2:36 PM
LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities continued to advance to above 1200 points on Monday boosted by higher cape and supramax index.
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 another 9 points to 1200 points on Monday.
The BDI is finding support from increased demand for capesize ships as China imports raw materials essential for the country’s infrastructure development. Over the longer term, it is uncertain if China’s infrastructure development is sustainable.
A pull-back in demand for new infrastructure would hit demand for raw materials, and therefore demand for ships to transport these materials into the nation. So, even though the recent rally in the BDI is encouraging, we are in no way out of the woods yet.