Dry bulk shipping’s Baltic Dry Index (BDI) is back on the up, just shy of breaking the 3,000 level once again. What’s striking about the rally is that Fearnleys highlights strength in the Atlantic (not pacific) as a key driver of recent strength.
Fearnleys: The Capesize market has experienced a healthy improvement this week, mainly driven by the demand for ships in the Atlantic. One week ago the rate for a transatlantic round was slightly below $43,000 daily, against current $58,000 daily. The tonnage balance in the Atlantic remains tight, and supply of fresh cargoes is steady. The fronthaul market is up from high $25 pmt to around $30 pmt basis Tubarao/China. In the east the 3 most influential charters; BHP, Rio Tinto and FMG are all active, supporting the positive trend in rates and an optimistic sentiment.
Be aware that the BDI can turn on a dime, though it’s strength right now is a sign of improving commodities demand, primarily iron ore. It also means that dry bulk shippers can earn some nice returns on their ships for the time being.