Baltic Dry Index rises to highest level since December 2023 — OilPrice
The Baltic Dry Index, which tracks freight rates for transporting raw materials along major sea routes, rose by 5.5% on Wednesday to 3,331 points in London. This is the highest level since December 2023, reports OilPrice.
Shipping demand and vessel shortages
The index covers freight rates for several vessel classes, including Capesize, Panamax and Supramax. Analysts at brokerage firm Thurlestone Shipping attribute its rise to a simultaneous reduction in available vessel supply and strong shipping demand in the Pacific and Atlantic oceans.
A series of typhoons in the Pacific Ocean this summer disrupted maritime shipping: vessels were delayed, while tonnage available to exporters declined. At the same time, Australian mining companies are increasing iron ore shipments after completing maintenance programs.
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Growth in iron ore flows
Higher cargo flows are also being supported by the modernization of transshipment operations, which is strengthening ore flows from the large Simandou deposit in Guinea. Wilson Wirawan, head of dry bulk market research at BRS Shipbrokers, noted that typhoons in the Pacific Ocean usually have a stronger impact on port operations in the second half of the third quarter. Potential delays and lower vessel efficiency, he said, could further limit available tonnage and support the Capesize vessel market.
Amid the rise in the Baltic Dry Index, shares of dry bulk shipping companies outperformed those of tanker operators. The increase in freight costs is linked to weather disruptions, longer voyages and stronger demand for shipments of iron ore, coal and grain.
