UNITED KINGDOM May 24 2017 12:55 PM
LONDON (Scrap Register): The main sea freight index at Baltic Exchange for ships carrying dry bulk commodities dropped further to 949 points on Tuesday driven by 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, dropped by another 05 point to 949 points on Tuesday.
While shipping companies were cautiously optimistic at the start of the year, hire rates are such that many shipping companies continue to operate at a loss.
At 949 points, the BDI has increased by over 300 points year-over-year. There are hopes that hire rates will improve in the fall, but if an anemic price recovery continues many shipping companies will continue to struggle. While we have only had one major bankruptcy this year, a protracted stretch of lower prices would definitely result in more casualties.