Baltic Dry Index Recovers

The Baltic Dry Index which plunged from a high of 11700 to 600 levels in Nov - Dec 2008 during the height of credit crunch has shown some recovery indicating a bit of easing in shipping activity, Currently its at 1600 levels.

What Does Baltic Dry Index Mean?

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea.

Changes in the Baltic Dry Index can give investors insight into global supply and demand trends. This change is often considered a leading indicator of future economic growth (if the index is rising) or contraction (index is falling) because the goods shipped are raw, pre-production material, which is typically an area with very low levels of speculation.

The recovery is good for shipping stocks like GE Shipping , as it indicates increasing shipping activity around the world.