Baltic Dry Index Higher for Fourth-Straight Sessio
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Posted On: 02/21/2017 6:44:31 AM
Baltic Dry Index Higher for Fourth-Straight Session; Rebounding From Lull Period
By Leia Toovey -February 20, 2017 - 18:30 GMT
After a Lunar New Year holiday slowdown that sent the BDI down to 688 points, shipping activity is rebounding. On Monday, the Baltic Dry Index added 16 points, reaching 757 points. This marked the fourth-straight session that the BDI ascended after the recent losing streak.
The recent weakness was expected. February is typically one of the most challenging months for the BDI as a seasonal retreat in seaborne trade pressures hire rates. Last year, in February, the BDI fell to a record low of 290 points.
Cautious optimism remains the prevailing sentiment when it comes to the 2017 outlook for the BDI. There is the expectation that seaborne trade of grains and soft commodities will remain high in the coming months due to harvest season. In the near-term iron ore demand should remain strong. One concern is that the outlook for the coal sector is mixed. With China’s heating season coming to an end demand for thermal coal will retreat. Metallurgical coal demand should remain supported from the steel sector. A potential wild card is the possibility for China to tighten its regulations on coal miners, again. This could result in an increase in demand for coal imports and add further support to prices.
Meanwhile, according to Freight Investor Service (FIS), technical factors have positioned the BDI for a rebound. FIS noted that the capesize Index has recently broken the $5,354 support from May 2016. While this is technically bearish it has put the index into oversold territory on the weekly chart, positioning it for an upward move. The capesize index is finding weekly resistance at $6,570. If the index manages to close above this level it would suggest that the longer term downward move has run its course. This level could then become a new baseline or mark the start of a new upward trend. Capesize ships are the largest ships in the BDI, and they primarily transport coal and iron ore.
http://www.economiccalendar.com/2017/02/20/ba...ll-period/
By Leia Toovey -February 20, 2017 - 18:30 GMT
After a Lunar New Year holiday slowdown that sent the BDI down to 688 points, shipping activity is rebounding. On Monday, the Baltic Dry Index added 16 points, reaching 757 points. This marked the fourth-straight session that the BDI ascended after the recent losing streak.
The recent weakness was expected. February is typically one of the most challenging months for the BDI as a seasonal retreat in seaborne trade pressures hire rates. Last year, in February, the BDI fell to a record low of 290 points.
Cautious optimism remains the prevailing sentiment when it comes to the 2017 outlook for the BDI. There is the expectation that seaborne trade of grains and soft commodities will remain high in the coming months due to harvest season. In the near-term iron ore demand should remain strong. One concern is that the outlook for the coal sector is mixed. With China’s heating season coming to an end demand for thermal coal will retreat. Metallurgical coal demand should remain supported from the steel sector. A potential wild card is the possibility for China to tighten its regulations on coal miners, again. This could result in an increase in demand for coal imports and add further support to prices.
Meanwhile, according to Freight Investor Service (FIS), technical factors have positioned the BDI for a rebound. FIS noted that the capesize Index has recently broken the $5,354 support from May 2016. While this is technically bearish it has put the index into oversold territory on the weekly chart, positioning it for an upward move. The capesize index is finding weekly resistance at $6,570. If the index manages to close above this level it would suggest that the longer term downward move has run its course. This level could then become a new baseline or mark the start of a new upward trend. Capesize ships are the largest ships in the BDI, and they primarily transport coal and iron ore.
http://www.economiccalendar.com/2017/02/20/ba...ll-period/
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