The growth of BDI exceeded the 900 points, the highest levels in a year.

The growth of BDI exceeded the 900 points, the highest levels in a year.
The growth of BDI exceeded the 900 points, the highest levels in a year.
Tuesday September 27, 2016

Baltic Dry Index finally broke 900 points on Wednesday for the first time since the end of October 2015, gaining 38 points to reach 903. This took several months longer than some market participants had earlier predicted.

Average spot TC rates were up across all major segments Wednesday, with Capesize earnings increasing to earnings of $14,366 per day (+$1213), Panamax growing to earnings of $5,397 per day (+$133), and Supramax reaching earnings of $6,918 per day (+$14).

In April, following a 131 percent jump to 671 from BDI’s record low of 290 in February, some analysts predicted that the index would reach 900 by the end of May.

On the other hand other experts at the time were warning the market participants not to place too much optimism on there being meaningful recovery, with an analyst suggesting that high-paced demolition sales would need to persist for at least two years before the market tis able to get on top of its unbalanced market fundamentals.

While scrapping has decreased from a reported 12.9 million DWT in Q1 2016 to 10.5 million DWT in the second quarter, dry bulk new build ordering activity is said to be almost non-existent. An analyst said that supply and demand is coming into balance. Also is said that there is both a healthy appetite and cash available for the purchase of vessels, with buyers said to be snapping up almost every ship being put up for sale.

Meanwhile a market expert says that the market still has a long journey to becoming profitable again. While another expert warns that the recent rise in capsize segment is somewhat artificial and ordering capes now would be a disaster.

Despite possible speculation on how lasting BDI’s recent gains may be, following last month’s collapse of South Korean box shipping giant Hanjin Shipping Co. Ltd, dry bulk is presumably no longer the concern for bunkers credit managers that it once was.


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