The Baltic Dry Index, which is the Baltic Exchange’s main index for measuring the performance of world trade, has fallen to a new low of 429 points for a fourth consecutive season as a result of the demand slump present in the shipping industry, according to gCaptain.
Omar Nokta, Analyst at the Research Division of Clarkson Capital Markets, said: “The first part of the year is typically the weakest point for dry bulk freight rates, which have been even weaker considering the low base at which they ended 2015.”
The index has plummeted 75 points below the recent record of 504, which was the lowest since the index began in 1985.
This record holds fears that the overcapacity seen in the industry could be worsening the impact on restoring the industry’s supply-demand imbalance, which Drewry argue is pulling down freight rates and accelerating losses.
Lines are scrambling to cut capacity on key routes to lessen the impact of the mega-class of containerships on key trade routes, which Drewry believe may be the best solution for restoring balance between supply and demand.