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TOPIC: Baltic Dry Index Hits All-Time Low of 310; Rail Traffic Continues Decline

Baltic Dry Index Hits All-Time Low of 310; Rail Traffic Continues Decline 02 Feb 2016 20:38 #1

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News released Tuesday reveals that the Baltic Dry Index has reached a record low of 310.

The Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793.

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying industrial commodities, slipped to another all-time low on Tuesday on worries about vessel oversupply and slowing global demand.

The index has yet to register a single session of gains this year, tumbling around 35 percent and touching fresh lows in 20 of the 22 sessions.
A slowdown in the Chinese economy, which grew at its slowest pace in a quarter of a century in 2015, and a huge over-capacity in vessels has hit the index hard.

The Baltic Dry Index is an economic indicator issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index provides “an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers Handysize,Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.

US RAIL TRAFFIC DECLINES
US rail industry monitor PowerSource outlines a continued decline in train traffic:

The nation’s rails have been carrying fewer loads recently, led by sharp declines in trains hauling coal, crude oil and other energy products, due to an unusually warm winter season and persistently low oil and gas prices.

Over the last year, shipments of coal and petroleum products on the U.S. freight railroad system are down 36 percent and 19 percent, respectively, according to traffic data collected by Association of American Railroads for the week ending Jan. 23.

Depressing traffic further, shipments of metallic ores and metals — which include coke for steelmaking and materials for pipelines — were down 16 percent from one year ago. Nonmetallic minerals, which include industrial sand used in natural gas drilling, were down 14 percent.

ANALYSIS
These two factors, shipping and rail decline, point toward a trend of decreased supply in retail inventory. Recent store closings by larger retailers reveals plans for a shrinking market:

Read more at www.trunews.com/baltic-dry-index-hits-all-time-low-of-310-rail-traffic-continues-decline/#fgfblvE40HhbWdit.99
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