Baltic Dry Index registers increase

The index reaches highest levels in eight months.

 

{reg} The Baltic Dry Index (BDI) reached its highest levels in eight months as the cost to hire vessels that haul iron ore and coal pushed earnings for some cargoes over $40,000 a day reports Market Review.

The Baltic Exchange said rents for the world's 1,237 capesize ships, comprising 40 percent of the dry-bulk fleet, declined 43 percent in the past 12 months, as growth exceeds supply. The capesize fleet is forecast to grow by 14 percent in 2011 and outpace demand until 2014, capping any rates recovery. Lower charter rates have caused a noticeable decrease in Dry Bulk shipping revenues, this in turn has squeezed the margins of shipping companies.

In the last year, an oversupply of ships and low demand has severely hurt the Dry Bulk Shipping industry and forced companies to search elsewhere for revenues. Among these companies are Genco whose voyage revenues decreased 6.5 percent to $98.5 million for the three months ended June 30, 2011, versus $105.3 million for the three months ended June 30, 2010. {reg}