Dry Bulk Weekly – August 22, 2010
Baltic dry index rose 11.7% last week; Capesize Index gained 11.5%; Panamax Index rose 7.9%; Supramax and Handysize Indexes gained 13.4% and 5.3% respectively.
Chinese steel mills resumed with iron ore purchases. Indian ore exports have effectively stopped because of export tariffs / rain season / illegal mining inquiries so Indian ore is being substituted with Australian and Brazilian. With the twist of speculative euphoria and unwarranted grain scare the rates ate flying. In my view this could go on for some time in short term, but in a 6 month or more time horizon too many new capsizes will come to the market and this could be the last rate bounce for years to come.
Chart 1. Baltic Dry Indexes Relative Performance
Source: Bloomberg
Chart 2. Baltic Dry Index
Source: Bloomberg
Chart 3. Baltic Dry Index Components
Source: Bloomberg