Baltic Dry Index Fell from 10-year High last fall

The Baltic Dry Index fell from 10-year highs last fall to lows this February. The index is a measurement of shipping rates over various routes for dry bulk cargo such as ore, coal, grains, and building materials. In spite of newly implemented IMO 2020 fuel regulations, the index fell dramatically. COVID-19 likely contributed to the drop along with a drop in fuel prices, which lowers operating costs. For instance, front-month Brent crude fell from a first quarter high of $68.91 on January 6 to $22.74 on March 31. Look for demand changes to influence rates as the supply of ships has a long lead time.