Baltic Dry Index: Volatility Revisited

The Baltic Dry Index (BDI) was trading at around 2,035 points on April 13th, 2022, compared to ~2,420 points on March 30th, 2022, versus ~1,644 points on January 19th, 2022, ~2,300 points on December 22nd, 2021 and vis-à-vis ~3,350 points during November 2021. That level compared to the 4,050-4,060 pts of October 27th, 2021 and to a previous trading level of around 5,380 pts on October 13, 2021. The above also compared to the trading level of 4,962 pts at the end of September 2021.   

Concerning the period before that, the Baltic Dry Index traded at around 3,650 points in the middle of August 2021 versus 3,281 points on August 4th, 3,058 points on July 21st, 3,179 pts on July 5th, 2021, and 2,420 pts during May 2021.

Our previous blog, a couple of weeks ago ended as follows: “… The dry bulk market may be keeping its current trading levels after the big dip seen in February, however given the continuous uncertainty on a number of fronts, and also due to the low visibility at this point in time, volatility could be looming and it goes without saying that market participants should remain cautious …”

The past two weeks saw the dry bulk market on a downtrend with the BDI currently trading about 700 points off the highs reached in middle of March i.e. almost a month ago.

A number of factors such as the war in Ukraine, the disruptions in the energy market, other disruptions on the supply side, the uncertainty over the current state of the Chinese economy given a surge in Covid cases, and the inflationary pressures that will make central banks to raise rates sooner than later, are all creating a big impact on the shipping market and investor expectations.

Despite the above, we don’t really see any substantial downside risk at this stage, and instead we hold on to our view that during the rest of the year the market will be trading above its historic average levels from which it is currently not so far away.

BALTIC DRY INDEX as of April 13th, 2022 (latest price and intraday change):    

BALTIC DRY INDEX as of March 30th, 2022 (latest price and intraday change):    

BALTIC DRY INDEX as of March 16th, 2022 (latest price and intraday change):    

BALTIC DRY INDEX as of February 16th, 2022 (latest price and intraday change):    

BALTIC DRY INDEX as of February 2nd, 2022 (latest price and intraday change):     

            Source: Bloomberg

FIGURE 1: Baltic Dry Index (BDI) | December 2021 – April 13, 2022    

[Bloomberg ticker: BDIY:IND, BDI Baltic Exchange Dry Index]

            Source: Bloomberg, Trading Economics, https://www.marinevesseltraffic.com/ , www.investing.com

FIGURE 2: Baltic Dry Index (BDI) | 2013 – April 13, 2022    

[Bloomberg ticker: BDIY:IND, BDI Baltic Exchange Dry Index]

            Source: Bloomberg, Trading Economics, https://www.marinevesseltraffic.com/ , www.investing.com

FIGURE 3: Baltic Dry Index (BDI) | Last 36 Years up to April 2022    

[Bloomberg ticker: BDIY:IND, BDI Baltic Exchange Dry Index]

            Source: Bloomberg, Trading Economics, https://www.marinevesseltraffic.com/ , www.investing.com