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BDI plunges to record new low of 484 points on Tuesday

BDI plunges to record new low of 484 points on Tuesday
The global dry bulk shipping market has been hit further by another record low Baltic Dry Index (BDI) at 484 points on Tuesday, following a previous low of 498 points on 20 November.

The historic low of 484 points on Tuesday and the 498 points in November are the only two times in history that the BDI has dipped below 500 points.

Yesterday’s index slump was due mainly to the 99 points drop for capesize index.

The sluggish BDI has also led to a continued negative sentiment for dry bulk assets, which have fallen sharply in Novemger and reached 16-year lows, according to a latest Dry Bulk Freight Forecaster from Maritime Strategies International (MSI).

The November average daily spot rate for a 170,000-dwt capesize was at a mere $5,700, and MSI is predicting the rate to fall to $4,200 in mid-February 2016 before climbing to $9,700 by mid-May.

A meaningful recovery in dry bulk in the short term, according to DNB Markets, would need a more “rational” China, which would need to accelerate closures in loss-making mines and keeping consumption growth in positive territory so as to increase iron ore and coal imports.

“We also believe one would need to see Indian ambitions to grow its domestic coal production being scrapped; if coal India actually succeed in approximately doubling its output from currently 0.5 billion tonne/annum to 1 billion tonne/annum in 2020 this would constitute a deep negative for the coal trade, which already is under severe pressure,” DNB Markets stated.