Baltic Dry Index

The Baltic Dry Index is an index covering dry bulk shipping rates and managed by the Baltic Exchange in London. According to Baltic Exchange, the index provides:

The index is made up of an average of the Baltic Supramax, Panamax, and Capesize indices. These indices are based on professional assessments made by a panel of international shipbroking companies. The index can be accessed on a subscription basis directly from the Baltic Exchange as well as from major financial information and news services such as Thomson Financial Datastream, Reuters and Bloomberg L.P..

Most directly, the index measures the demand for shipping capacity versus the supply of dry bulk carriers.However, since the demand for shipping varies with the amount of cargo that is being traded in the market (supply and demand) and the supply of ships is much less elastic than the demand for them, the index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers, such as cement, coal, iron ore, and grain.

Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity, steel, and food, the index is also seen as a good economic indicator of future economic growth and production, termed a leading economic indicator because it predicts future economic activity.

The BDI factors in the four different sizes of oceangoing dry bulk transport vessels: []

References

External links

* [http://www.balticexchange.com/ The Baltic Exchange]
* [http://www.drybulkindex.com/ Dry Bulk Index]
* [http://www.slate.com/id/2090303/ The best economic indicator you've never heard of] - Article at Slate.com
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