As China's economy picks up, demand for iron ore from Chinese steel companies is rapidly increasing driving up daily charter rates for medium and large bulk carriers, allowing the Baltic Dry Bulk Index (BDI) to soar since June, rebounding nearly four times from its low in the past month to hit a new high in nearly seven months .
The BDI index maintained its upward trend for three consecutive weeks, with the BDI index rising 192 points on June 17, recording the highest single-day percentage gain in history. on June 18, the BDI rose 22.55% sequentially, setting a new record for the largest single-day gain in history. on June 19, the BDI index closed at 1555 points, and in this week, the BDI index increased from 973 points on June 15 to 1555 points, a single-week gain of nearly 60%. On June 26, the BDI was reported at 1749 points, up 236% from the beginning of the month, hitting a new high this year.
The Baltic Dry Index is a barometer of the global economy, reflecting changes in spot freight rates on several of the world's major routes. It mainly involves the transportation of food and raw materials such as grain, iron ore and coal, and is closely related to the economic boom.
The freight rates of Capesize (Cape of Good Hope), Panamax (Panama) and Supramax (Super Handy) are 40%, 30% and 30% respectively. Among them, the Cape of Good Hope type vessels have a carrying capacity of more than 80,000 tons and are mainly used for long-distance transportation of industrial materials such as iron ore and coal; Panamax type vessels have a carrying capacity of 50,000-80,000 tons and mainly transport livelihood materials such as grains and sugar; Supramax type vessels have a carrying capacity of less than 50,000 tons and mainly transport grain, fertilizer, cement and other products.
The index once plunged to a low of 393 points in early May due to the global trade freeze caused by the new crown virus epidemic, and since then it has soared nearly fourfold.
Industry experts analyze that the rebound in the index is mainly due to the recovery in Chinese demand for iron ore, and moreover reflects the strong resilience and growth potential of the Chinese economy.