Bulk freight rates making a rally
Baltic Dry Index up 1200 points in past month
Dave Hannon -- Purchasing, 11/10/2009 11:36:59 PM
The Baltic Dry Index has been on a rally for most of the past month, shooting up from 2400 a month ago to its recent close at 3615.
According to an analysis by N. Cotzias Shipping Group, the bulk freight rate spike has been "greatly helped by the increased commodity demand and the general world trade that has been on a steady increase. China's increased imports of iron ore are still the main cause of the steady increases at least in the two main bigger sized dry bulk segments."
It has been a roller-coast year for the Baltic Dry Index. In June it peaked at well above 4000, but in the end of 2009, it was as low as 600.
The freight rate rally comes at a time when many carriers are struggling to match capacity with demand coming out of the recession. "An ongoing strengthening of dry bulk commodity demand is being overshadowed by accelerating capacity additions in [the third quarter] and the likelihood that this fleet expansion will remain robust through next year," J.P. Morgan Securities analysts told the Wall Street Journal recently. "We believe that fleet expansion was a major contributor to the [third-quarter] rate weakness as deliveries in [the third quarter] nearly doubled that of [the first half]."
Just this week, Diana Shipping took delivery of a new capesize vessel which it has chartered to a Chinese firm at $55,000/day.
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We've actually covered container rates recently as well in these stories (put them into the "search" window to find them on our site):
Ocean carriers push more container rate hikes amid volume declines (Nov. 5)
Ocean container carriers push "significant" rate hikes (Oct. 7)
Editors of Purchasing - 11/11/2009 3:11:57 PM EST -
Would love to see similar information for container ocean freight from China to east coast US.
Don Rundle - 11/11/2009 2:39:57 PM EST
Dry bulk freight rates trend up
02/10/2009Bulk Freight Rates Sink
02/09/2010Ocean freight rates to peak in 2008
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