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Baltic Dry Index hits year high - a turnaround in sight?

Baltic Dry Index hits year high - a turnaround in sight?
The Baltic Dry Index (BDI) hit a year high of 829 points on Wednesday, and while still at a very low level it there are some signs of a turnaround for the beleaguered dry bulk sector.

The key indicator, which averaged just 576 points in the first five months of the year has climbed consistently in June.

Bimco chief shipping analyst, Peter Sand said, “We have seen the BDI constantly go higher since end-May. Chinese iron ore fixtures has been on a slow but rising trend throughout the year, so what we are seeing now has been long coming.”

Accelerated scrapping of capesizes has also helped to moderate ship supply.

“But this is not all about the demand side the lift would not have been possible without the support coming from a decreasing capesize fleet size. Since we entered into 2015 the capesize fleet is now short of 22 ships equal to a drop in capacity of 0.7%,” Sand said.

However, at current levels dry bulk freight still remain at well below breakeven levels and Sand warned that despite recent developments the market “is still moving forward on fairly thin ice”.