Why Is Baltic Dry Index Falling if World Is Recovering? from SeekingAlpha.com:

HWhy Is Baltic Dry Index Falling if World Is Recovering? from SeekingAlpha.com

Stephen Rosenman submits:
Why would the Baltic Dry Index (BDI) fall if the world's economy is really recovering? After all, growth should be accompanied by an increased demand for ships to transport iron, coal, fertilizer, and other commodities.

The answer is that the BDI is heavily weighted to the cost of leasing the large Cape ships, the ones that are too large to squeeze through the Panama Canal and, therefore, must go round the Cape. Traditionally, Capes carry huge iron loads. Capes have their own "index", the Baltic Cape Index (BCI), which tracks their spot rates. Both the BDI and BCI have performed poorly.



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