Baltic comes under attack with claims indices are being kept low to suit charterers
Shipping’s Twittersphere erupted over the weekend with the launch of a new account, @ActionBaltic, which has made a number of claims that London’s Baltic Exchange is rigged and needs urgent change. The accusations have been dismissed as “fake news” by the Baltic.
The people behind the Baltic attacks have refused to reveal their identities, describing themselves on Twitter as “taking aim at the Baltic Exchange, its opaque practices, lack of oversight & transparency”.
The argument made by @ActionBaltic is that the indices are deliberately low, in favour of all powerful charterers and do not reflect market realities.
The incendiary claims made via social media claim both the Baltic Dry Index and forward freight agreements are manipulated by the management of the Baltic Exchange, a 275-year old London institution bought out by the Singapore Exchange in 2016.
A spokesperson for the Baltic told Splash the claims were false. “The internet is full of fake news and conspiracy theories and so the appearance of an anonymous Twitter account claiming that the Baltic indices are rigged is really not particularly surprising or interesting. The Baltic Exchange’s indices, underpinned by robust methodology, have been trusted by shipowners, charterers and traders to benchmark the spot shipping markets since 1985,” the spokesperson insisted.
The Baltic opponents have denied that they are linked to FFA trader, Paralos Fund, which has recently attacked the exchange over its IMO 2020 response plan.
When contacted by Splash, @ActionBaltic stated its aim was to highlight the “lack of oversight, mismanagement, and manipulation” at the Baltic.
"Broker ASSESSMENTS": Really, who are the biggest clients of brokers if not the #charterers? Would you be interested NOT to lose your biggest customer? …So do the brokers! This is why they provide "ASSESSMENTS" and not ACTUAL, LAST DONE information. @BalticExchange is #RIGGED pic.twitter.com/GwY0rpWg0c
— Baltic Exchange for change (@ActionBaltic) March 9, 2019
Ask:
– #Shipbuilding has slowed down – few new #ships delivered
– #Market demand is growing at about 3% avg
– #Ships go out of service to retrofit #scrubbers = FEWER SHIPS in the market!
– #China is still growing at 6.5%, the US at 3%!
…SO WHY IS THE $BDI SO DOWN??? #RIGGED pic.twitter.com/8UV0dhDe3R— Baltic Exchange for change (@ActionBaltic) March 9, 2019
This is the biggest load of nonsense i have read for a long time !! What is the advantage to a ship broker of keeping rates low ? His bread and butter is called commissions and at 1.25% you earn more with a fixture at $ 10,000/day compared to one at $ 5,000/day . Historically the trend has been for panellist brokers to mark better and faster a rising market , so the analysis in your article is completely wrong and based on totally the wrong premises . The production of the Baltic Indices has been a work in progress since January 1985 and has evolved in constant consultation with the shipping industry over that time. Furthermore to go and claim that the FFA pricing is influenced by the Baltic in order to manipulate the prices is so idiotic as FFA prices are produced by the buyers and sellers of these products . It has not always been plain sailing , but overall the process has worked well and is widely accepted by the shipping community . You are so badly informed , it is almost laughable as your rantings of brokers only producing assessments and not actual fixtures is 100 % wrong . And i will answer one simple question : The BDI is at 649 because there are too many ships and not enough cargoes , ok stupid !! And you dont even have the guts to come out and tell us all who you are , hiding behind the veil of a twitter account ! You are just a bunch of lowlife cowards with a shallow knowledge of our industry. Please go away .
Last but not least i dont really understand why Splash 247.com and Mr Sam Chambers lower themselves to publish this piece of hideous journalism , it is offensive and couter productive
I always start these posts by saying I am a futures “old timer” (actually went head to head with competitors like Philippe van den Abeele back in the day!!!). But I recall that “charterer manipulation” was a war cry of those who were holding “long” contracts that drifted downward- even back when the whole futures thing started in the mid 1980s. Back then, the bad guys were grain companies (charterers). The index mechanism has gotten better; I am not sure if there’s ever been an actual audit. But for 35 years, it’s worked without incident- meaning no “collusion” or “manipulation”. With social media, it’s easier for those with losing “long” positions to voice their “discontent”. I would rephrase what Philippe said about supply and demand- the drybulk market is given to overcapacity. Research on the subject shows that such economics (years of lows, then a huge spike for a short period of time, then more lows) prevailed back in the pre IMO2020 days of the mid 18th century. Kondratieff waves, anybody? I disagree with Philippe about the role of the media- Splash247, or others, should publish such whatever grabs the eyeballs/ clicks- but readers should recognize that the Splash media is reporting on a social media post, not on any substantiated fact, or- in this case, not even a substantiated accusation.
I agree with both Philippe and Barry, save that Sam at Splash is a seasoned journalist who ought to check better for facts before spreading anonymous “news”. That aside, Splash has produced many interesting stories which were not covered elsewhere… so perhaps Sam can be challenged to provide more certainty to this story before damage is done to his and others’ reputations ?!?
Hi Jeffrey – thanks for the comments. I was merely reporting what was carried on social media, and despite repeatedly asking for the identity of @ActionBaltic, this request was denied. In terms of publishing this story, we felt it was newsworthy as a one-off (readership figures back that up!), and of course, we sought the reaction of the Baltic, who branded the Twitter account’s claims as ‘fake news’.
These attacks emanate from an anonymous Twitter account in a context where the need for anonymity is still elusive to me. Be them anonymous or undisguised, I admire whistle-blowers who denounce cruel dictators, criminal rackets, thuggish magnates and systemically corrupt entities, provided they do so with corroborating evidence. FFA time series displaying sharp price fluctuations captioned with simplistic conspiratorialist conjectures are not evidence of anything other than the bitterness of someone who got his market bets wrong and who is desperate to shift the blame onto someone else. Without convincing relevant evidence, anonymous denouncements are not the work of courageous whistle-blowers but that of libellous cowards.