Dry Bulk Weekly – 14 March, 2010
Baltic dry index rose 8.1% in the last week. Capesize, Supramax and Handysize Index outperformed the BDI, Panamax Index underperformed.
Rumors in the iron ore market continue; worlds largest iron ore producer Vale even thinking on abandoning yearly price fixing and selling iron ore on spot market. There is a great disparity between iron ore producers price demand and steelmakers ability and will to pay. Negative steel margins is a factor hard to get around. Looks like again the iron ore price will be again fixed later than the usual. Steel price is worth looking at, a weaker demand here would be a market turning development.
Fixing activity looks light and price increases are largely expectational (not demand) driven. The market path is still biased to the upside.
Chart 1. Baltic Dry Indexes Relative Performance
Source: Bloomberg
Chart 2. Baltic Dry Index
Source: Bloomberg
Chart 3. Baltic Dry Index Components
Source: Bloomberg