Category Archives: Baltic Dry Index

24/2/2017: Baltic Dry Index is Still in a Disaster Territory


All of the discussions about the Baltic Dry Index - a proxy for global trade flows - in recent weeks was centred on the alleged recovery in the index valuations from the historical lows of 1Q 2016. Much of this recovery was predicated on the cost of fuel that went to inflate the cost of shipping, rather than the genuine uptick in global trade.

In fact, as the most recent data suggests, uptick in global trade volumes is nowhere to be seen:



Source: https://www.fxstreet.com/analysis/global-trade-disaster-nearly-certain-201702220646

But here is a look at the trends in the Baltic Dry Index confirming the simple fact that whatever recovery there has been, the index readings remain deeply in a trade-recession territory:



Worse, Suez Canal traffic is still trending down: http://www.hellenicshippingnews.com/suez-canal-revenues-decline-in-wake-of-sluggish-global-trade/, although Panama Canal volumes are hitting new records http://www.tradewindsnews.com/andalso/1213246/panama-canal-volumes-hit-new-record (the data is not adjusted for the capacity expansion since June 2016). Even with that expansion, Trans-pacific trade is up only 4.3% y/y in 2016, an improvement on 3.7% growth in 2015, but much worse than 5.9% growth in 2014 (see http://www.hellenicshippingnews.com/volume-recovery-in-far-east-europe-and-transpacific-trade/).

Overall, even the improved Baltic Dry Index current average for 2017-to-date is at around 831.6, which is below all 2009-2014 annual averages. Not exactly a sign of booming global economy.

7/2/16: You Gotta Have Some Heart: Baltic Dry Index


As the global growth prospects are apparently and allegedly improving, and the world is busy printing money left right and centre with currency devaluations rounds stimulating the fabled 'competitiveness', the world trade indicators are no longer flashing red. They are, frankly, in a free fall.

Remember Baltic Dry Index? The one that reflects volumes of goods trade flows? And the one that was testing new record lows almost daily around the end of December 2015 through January 2016?

Behold the latest record: Baltic Dry is now below 300

H/T to @soberlook

Time for IMF eagles to fly some forecasting models to tell us things are just going fine at 5% annual global growth click... Yes, yes... that is, to repeat gain, Baltic Dry at its lowest level in its history.

PS: Ireland's exports are, of course, insulated from all this global nonsense... because when times get tougher in the markets, tax optimisation becomes even more important to MNCs.

30/12/15: Baltic Dry Index: Brick in Search of a Lake’s Bottom


While IMF (belatedly) is warning about the risks of slower global growth, the Baltic Dry Index - a strong instrumental variable for global trade flows - has been sinking and sinking, like a brick searching for the bottom.


Yes, IMF did project back in October WEO that global growth will reach 3.56% in 2016, up on 3.123% in 2015. And that the growth in volume of trade flows will rise form just under 3% to 4.3%, with much of this growth accounted for by increased rate of growth in trade in goods (from 2.9% in 2015 to 4.13% in 2016). But, hey... one day someone will be booking real stuff on foot of IMF forecasts. Until then, good news-bad news from Washington forecasters mean zilch for the Baltic Dry.


22/12/15: Baltic Dry Index: not much of a post-Fed bounce


With the optimism of Christmas week forecast (traditionally keen on stressing the upside to the global economic conditions), let's not forget the Baltic Dry Index:


As the chart above shows, global trade ain't doing too well in this *finally repaired* and *full employment-bound* world economy. In fact, the index has been ploughing the depths that put to shame even the abysmal December 2008 crisis lows. Not surprisingly, the post-Fed bounce was pretty much a fizzle...


Ho-ho-ho...