Dry Bulk Weekly – 7 March, 2010
Baltic dry index rose 18.4% in the last week. Rocket propelled lift-off. Capesize and Panamax Index outperformed the BDI, Supramax and Handysize Index underperformed.
The Chinese buyers returned to the iron ore in a big way. Mayor factor here are iron ore price increase agreed in the annual price talks, the rumors range from 30% up to 100%. If we talk in the upper band numbers, price increase in that range could spur substitution of imported iron ore with the domestic one and it would push the rates down. Port congestion is also an important factor keeping rates high.
Looks like we will see additional gains in dry bulk charter rates.
Chart 1. Baltic Dry Indexes Relative Performance
Source: Bloomberg
Chart 2. Baltic Dry Index
Source: Bloomberg
Chart 3. Baltic Dry Index Components
Source: Bloomberg