The decline in the Baltic Dry Index (BDI) this year is the worst on record, with the exception of the calamitous drop in the wake of the collapse of Lehman Brothers 11 years ago, according to data from Alphabulk, part of AXS Marine.
Alphabulk analysed the severity of the drop via percentage changes in the BDI over five- and 10-day periods as well as looking at volatility within the index.
Using the three-month trailing annualised standard deviation of daily returns of the BDI shows that excluding the first half of 2009, the volatility experienced at the end of January is the highest ever recorded, recently going higher than 60%.
The Vale dam disaster and Chinese new year have regularly been cited as key reasons for the fall, but Alphabulk believes there are more fundamental at issues at play.
Meanwhile, Drewry Maritime Financial Research has issued a new dry bulk report in which it notes that five of the dry bulk shipping stocks under its coverage delivered a negative return of 24.4% in 2018. Moreover, the dry bulk shipping stocks under Drewry’s coverage are down 13.2% since the start of 2019.
Cleaves Securities’s latest weekly report shows that there has been no respite for capesize owners in the past seven days. Cape spot rates have fallen below opex and to the lowest levels in more than two years, Cleaves noted. Splash has seen spot rates for as low as $3,000 a day being banded around.
Ending on a hopeful note, Cleaves concluded: “We still believe that the current weakness represents the intra-year low for 2019, and forecast dry bulk spot rates to average 140% higher in 2Q19.”
The BDI closed on Friday at 634 points, having slid to below 600 points earlier in the month.