Shipping News
Forget the Dow, which some traders are now calling the Dow Junk Average. An index that’s pointing upwards of late is the Baltic Dry Index, which tracks dry bulk shippers. The BDI tracks the changes in prices for shipping raw materials by sea. Dry bulk shipping is the strongest sector in the market as of today, February 4, with the following shipping stocks all showing gains of over 10%: EGLE, EXM, OCNF, GNK, DRYS and DSX. The BDI has made its biggest gains since 1985, having gained over 70% from its lows over the past month, according to Bloomberg.
It’s no surprise that the credit crisis brought the shipping index down. What’s buoying it up now includes a number of factors. One is seasonal demand for iron ore, another is the Chinese New Year and the fact that Chinese banks have resumed lending. There is also the U.S. stimulus package which will necessitate shipping raw materials.
The Baltic Dry Index has recently shown its greatest gains since at least 1985, according to Bloomberg.com. The BDI measures the changes in prices for shipping raw materials by sea. The index has been rising modestly for the past month, gaining more than 70% off its lows. It’s about time. The BDI was down more than 90% from its 2007 highs to its lows last December.
The BDI is issued daily by the London-based Baltic Exchange. The index defines itself as providing “an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a time charter and voyage basis, the index covers Handymax, Panamax and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.” Its roots are actually in the Virginia and Baltick Coffeehouse in London’s financial district in 1744.