What are the routes taken into account for calculating the BFI?
It is calculated by the Baltic Exchange, based in London, a key market for the global shipping business. Description: BFI is a weighted average based on 11 international ship routes and three commodities – coal, iron ore and grain. It reflects on the freight and charter rates of these commodities on these routes.
What is the Baltic Dry Index and how does it works?
Key Takeaways. The Baltic Dry Index (BDI) is an index of average prices paid for the transport of dry bulk materials across more than 20 routes. The BDI is often viewed as a leading indicator of economic activity because changes in the index reflect supply and demand for important materials used in manufacturing.
How do I get the Baltic Dry Index?
Indexes are not investable securities, but investors have some choices that offer exposure to the Baltic Dry Index.
- Dry Bulk Shippers. Perhaps the most obvious way to get exposure to the Baltic Dry Index is through the shares of dry bulk shipping companies.
- Commodities Producers.
- Country Funds.
What is the Supramax index?
Baltic Supramax index
What is freight Baltic index?
Definition: BALTIC Freight Index (BFI) is a leading indicator of spot dry bulk cargo rates. It is not a shipping index, but an indicator of the bulk cargo market. It is calculated by the Baltic Exchange, based in London, a key market for the global shipping business.
Why is Baltic Dry Index Important?
The Baltic Dry Index is a leading indicator that provides a clear view into the global demand for commodities and raw materials. The fact that the Baltic Dry Index focuses on raw materials is important because demand for raw materials provides a glimpse into the future.
Why is the Baltic Dry Index so high?
* “Dry bulk ships are spending a lot more time waiting outside of ports, both because there are so many ships and also due to the new (pandemic-led) quarantine measures around the world,” said Emily Stausboll, shipping analyst at BIMCO, that adding various economic stimulus measures are also helping dry bulk demand.
Why is BDI dropping?
Commodity Demand. If expectations about future demand change and producers reduce their raw materials demand accordingly, then the BDI will drop.
What is Supramax vessel?
Supramax vessels are medium-sized vessels with a carrying capacity between 48,000 and 60,000 DWT, with a typical draught of 12.2m and 199m length. Because of their smaller size, Supramax vessels can enter and exit smaller ports.
Why is the Baltic index so high?
The Baltic Dry Index typically increases in value as demand for commodities and raw goods increases and decreases in value as demand for commodities and raw goods decreases.
What makes up the Baltic Dry Index?
The Baltic Dry Index (BDI) is issued daily by the London-based Baltic Exchange. The BDI is a composite of the Capesize, Panamax and Supramax Timecharter Averages. It is reported around the world as a proxy for dry bulk shipping stocks as well as a general shipping market bellwether.
Why did Baltic Dry Index spike in 2008?
Shipping costs were previously so expensive because demand was strong and enormous cargo ships can’t be built overnight. As the demand disappeared, the Baltic Dry dived. Moving huge quantities of cargo is an energy-intensive activity, so the slump in oil prices is a large part of what’s happening here.