The Baltic Dry Index, a measure of commodity shipping costs, fell for the longest period in almost nine years as declining Chinese steel prices erode the nation’s iron ore demand.
The index of freight rates on international trade routes fell 38 points, or 2 per cent, to 1,902 points today, according to the London-based Baltic Exchange. Today’s drop was the 31st straight decline. That’s the longest since the 34 sessions to Aug. 15, 2001, according to Baltic Exchange prices. Charter rates for all types of ships tracked by the exchange fell.
Remember though, the BDI is a complicated measure. The slump isn’t jut about demand, but rather supply as well. And we’ve heard plenty of evidence that shippers are bringing on capacity at record pace. It’s still deflation, but if you’re looking for evidence of demand collapse, look elsewhere.