We often come across the term "BALTIC DRY INDEX" whenever we read about shipping industry, container shortage issues, commodity prices etc.
Made a quick informative thread about what exactly it is and what to interpret from it.
WHAT IS IT?
The Baltic Dry Index issued daily is a market barometer and leading indicator of the shipping industry.
The Baltic Dry Index (BDI) is issued daily by the London-based Baltic Exchange.
The BDI is a composite of the Capesize, Panamax, Supramax Timecharter Averages.
How BALTIC DRY INDEX dropped in 2008 ?😱
ANSWERED BELOW 👇
REASON ?
China buys most concrete, aluminum, copper & steel in the world.
But as services have started to play bigger role in world's 2nd largest economy its demand for commodities has leveled off.
Too many ships & falling demand from its biggest customer puts a cap on the BDI.
BDI ALONG WITH OTHER ECONOMIC INDICATORS -
GDP, volatility index, crude oil prices, interest rates and exchanges like S&P 500, FXI, Japan Nikkei 225 and London FTSE.
These are followed by Economists/Investors as leading indicator for economic growth and production
