Wednesday
May122010
Baltic Dry Index: A Wild Ride Higher
Wednesday, May 12, 2010 at 10:26AM Given that it tracks the cost of shipping goods around the world, the Baltic Dry Index is often looked to as a leading indicator of the global economy. However, if the global economy was anywhere near as volatile as this index, we'd all be a lot more stressed. While the index is considerably higher today than it was a year ago, it has been on a wild ride. Following the 49% decline back in the Summer of 2009, the Baltic Dry Index rallied 113.5% before once again falling 44.5% from November through February. Since then, the index has rallied 51% and is up 8% in the last week alone.
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Reader Comments (2)
sure in the past the BDI has been a good economic indicator but one has to discount this going forward due to the large excess capacity in the shipbuilding industry and the overhand of newbuild ships coming out of the yards. ships operators have been slowing down ships to save fuel and reluctant to bring ships out of dock due to uncertainty about the outlook which has led to temporary squeezes - but just temporary due to long term large capacity. It will be quite some time before the industry absorbs all the newbuild capacity.
What is the Bloomberg code of this index? The one I find seems to have different units...