Nena News

Baltic Dry Index rises to five-week high

(Montel) The Baltic Dry Index (BDI) has risen by 12% over the past month to around a five-week high as Asian coal demand, port congestion and strong grain exports underpin panamax vessel rates, participants said on Tuesday.

The BDI, which tracks global dry freight rates, was assessed last at 1,210 points, having recovered from 5 February’s six-month low of 1,082 points.

The Baltic Panamax Index, which reflects rates for the 60,000-80,000 deadweight-tonne segment, slumped to a five-month low of 1,228 points in mid-February, but has since surged 22% to 1,502 points.

“Panamax vessels have been pretty busy on long-haul coal routes, such as from the US [to Asia],” said Hans Gunnar Nåvik, senior analyst with Oslo-based Nena.

“Also, there is high congestion in Indonesia, due to heavy rains, which – combined with strong Indian demand for Indonesian coal – is taking up some tonnage,” he said.

Montel reported last week as many as 80 vessels were waiting to load coal at the key Indonesian export hub of Samarinda, in the country’s key East Kalimantan producing region.

The Baltic Exchange also cited “continued Indonesia activity” as a driver for panamax rates, in its weekly briefing. 

And this was occurring at a time of strong panamax vessel demand for grain exports from South America, where a record harvest was expected, Nåvik noted.

Shipbroker Fearnleys said that demand for panamax vessels in Asia “appears to remain”, with transpacific round voyages priced at relatively high levels.

“[There has been] good activity reported after the Chinese New Year [and] generally, the short-term outlook remains stable,” the shipbroker said in a note.

Reporting by:
Laurence Walker
13:27, Tuesday, 6 March 2018