Baltic Dry Index closed at 2225 on Friday. Source: The Baltic Exchange
THE Baltic Dry Index has now reached 2,225 points, recovering from a low of 663 on Dec 5.
That sharp recovery in the freight rate indicator for the marine transport business, particularly in dry-bulk shipping, does spell relief for dry bulk companies.
They, nevertheless, continue to face severe issues. With a major orderbook being unleashed onto the market, there will be an overwhelming overcapacity and unprofitability that could even threaten the banks that financed the newbuilding.
More than 3,000 bulk carriers are on order at 155 different yards in 15 countries by 479 known owners. All are scheduled for delivery by 2011.