This year has seen the Baltic Dry Index increase from record lows in February to its highest level in more than two years in November.
Although considerable uncertainty persists in the dry bulk shipping market, several analysts believe the recovery can continue in 2017.
Relatively speaking, 2016 looks as if it will go down as a good year for the dry bulk shipping sector. The Baltic Dry Index (BDI), which is a measure of activity and freight rates for moving commodities (raw materials) by sea, had by mid-November risen more than four times on its record low in February. Indeed the 1,257 points was the highest level achieved by the BDI in more than two years, and came after a first half-year performance when the BDI was about 30% lower than in the corresponding period of 2015.
While there is optimism that 2017 will see the BDI post further gains, it needs to be noted that the index remains well below levels scored in 2014, and that second-hand prices for most bulk carriers have fallen sharply.
Moreover, the outlook for the global economy and for key dry bulk commodities, such as iron ore and coal, remains uncertain. In addition, significant levels of over-tonnaging prevail.
The recent recovery has taken place on the back of:
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