Thursday, January 08, 2009
Baltic Dry Index posts first upward session in 2009
Thursday, 08 January 2009
After a number of consecutive negative sessions, stretching back into the last days of 2008, the Baltic Dry Index (BDI) which tracks shipping rates for hiring vessels to carry commodities like iron ore, grain and coal, managed to post its first rise. The index ended yesterday at 789 points, up by 14 points from Tuesday. This was mainly thanks to the capesize sector, which saw the relative index (BCI) rising by 46 points to reach 1452 points. Similarly, panamaxes managed to put a stop at the constant falls, rising by 8 points at 533 points. According to the Baltic Exchange figures, the average time charter for a capesize dry bulk carrier now stands at $9856, while a panamax can fetch an average of $4255. Supramaxes earn an average time charter of $4082, with handysizes bearly surpassing the $4,000 mark.
Barry Rogliano Salles’ (BRS) first report of the year, said that things don’t seem much different in the dry bulk market. “Fixing Capes in the Pacific was almost the only game to play last week, and for the rest there was hardly something to write on. However for the moment the fate of the freight market is being discussed on the dry land with some huge restructuring and strategy changes operated in China. After the production cuts applied during the fourth quarter of 2008 as an emergency reply to the demand slump, now the steel mills are revising their output targets for 2009. While steel production has been registering a two-digit growth since the start of the decade, 2009 may hardly see any growth at all” said BRS.
Another factor to watch is the evolution of the contract talks about the iron ore price for 2009. Stronger steel groups in China could change the terms that these talks are held. Further to that, one of the latest changes implemented in China is the new system to regulate the iron ore import market. As BRS notes, “companies with import qualification will have to limit their purchase more strictly to their own needs and pay an agent fee if they want to re-sell imported ore”.
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