The Baltic Dry Index rises 6-fold

The daily cost of chartering a large ship has risen 6-fold over the past 12 months.

I wanted to highlight the quantum of the rise instead of the absolute price. This increase is surely contributing to the rise in global producer price indexes.

Over the same time, the price of Coal, Iron Ore, Corn, Soybeans & Wheat have also doubled. These commodities account for approx. 65% of the global dry bulk trade. Steel products, sugars and cement account for the other third.

While many will compare where the Baltic Dry Index has been historically, but for now it is Overbought and trading at an ‘extreme’ high on my various measures.

For now, I’ll ponder how the rising shipping costs will work themselves into the goods being currently delivered and if buyers are willing pay for the higher prices being passed on?

#inflation#shipping#bdi

April 28, 2021
by Rob Zdravevski
rob@karriasset.com.au