BDI in Uptick but with Volatility Looming       

[Thursday Tuesday February 20th, 2024]                                 

The Baltic Dry Index (BDI) settled at around ~1,629 points (USD) on February 20th, 2024 versus ~1,308 points (USD) on January 18th, 2024 i.e. the date when we released our previous blog. Previously, the Index had settled around ~1,523 points (USD) on November 7th, 2023 and traded notably higher at 2,105 points (USD) on October 18th.    

In the earlier period, and specifically from May 10, 2023 until June 2, 2023 the BDI recorded a significant drop i.e. from 1,633 to 919 points, while in the immediate previous period i.e. from March 7, 2023 to May 10, 2023 the Index was trading along the channel of 1,300 – 1,650 points.   

From June 2020 up to February 2024, the Baltic Dry Index has been convincingly trading above the psychological level of 1,000 with the exception of two periods, i.e. firstly the period January – February 2023, when the Index hit a low of around 500 points, and secondly the period May – June 2023. In the beginning of July 2023, the Index also slipped below 1,000 for a few trading sessions.   

Our previous blog, on January 18th, 2024 with the Index at ~1,308, was reading as follows:

    “… The dry bulk market landscape remains unpredictable and volatile as geopolitical tensions along with readjustments of sea transportation routes due to the Red Sea crisis, as well as uncertainty over the timing of interest rate cuts within 2024 might lead to ups and downs in the broader economic sentiment impacting freight rates. In the short-term horizon, we would anticipate a potential consolidation of the BDI around or close to the historical average levels. …”    

With interest rates descending very slowly within the year 2024 according to the best case scenario, we would be very cautious in adopting a bullish outlook for global economic growth and international demand for goods that could be transported via the shipping market. The broad average historic price range of BDI is settling at 1,000 – 2,000 and in this context we continue to view as most likely scenario for the Index to be trading within this range. We also assign a greater probability for the Index to be fluctuating within the subrange of 1,000 – 1,500 compared to the subrange of 1,500 – 2,000.   

BALTIC DRY INDEX as of February 20th, 2024 (latest price and intraday change):    

BALTIC DRY INDEX as of January 18th, 2024 (latest price and intraday change):    

BALTIC DRY INDEX as of December 6th, 2023 (latest price and intraday change):    

BALTIC DRY INDEX as of October 4th, 2023 (latest price and intraday change):    

BALTIC DRY INDEX as of September 1st, 2023 (latest price and intraday change):    

BALTIC DRY INDEX as of March 1st, 2023 (latest price and intraday change):    

BALTIC DRY INDEX as of February 15th, 2023 (latest price and intraday change):    

BALTIC DRY INDEX as of October 12th, 2022 (latest price and intraday change):    

            Source: Bloomberg   

FIGURE 1: Baltic Dry Index (BDI) (in USD) | August – February 20th, 2024    

[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) (in USD) | 2014 – February 20th, 2024    

[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) (in USD) | Last 39 Years up to February 20th, 2024    

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

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