Dry Bulk-Dry Hole

A little more than ten years ago, there was talk of the Baltic Dry Bulk Index (BDI) becoming the de facto measuring rod for the global economy. It made sense and for a while, it appeared to be the perfect tool. Then the industry went on a spending spree, ordering newer and larger vessels, but ignored business cycles, and eventually faced dire economic circumstances. On Friday, the index closed at an all-time low.

So, while it’s no longer a perfect tool, there is a correlation between the transfer of goods and a demand for those goods. On that note, I saw a glimmer of hope with the largest of ships, which bucked the trend with a strong finish into the second half of the week.

Capsize ships have payloads of 100,000 tons or more.

With legitimate questions about the global economy and even the United States slipping into a recession, we have to look at all of the data, including the Baltic Dry Bulk for signs either way.