South Korean bulk carriers are likely to see improved earnings in the third quarter of the year on the back of strong freight rates, analysts here said Saturday.
The Baltic Dry Index (BDI), a measure of freight for commodities, last week topped 2,500 points, the highest since 2010, according to data from the London-based Baltic Exchange. Although the index fell to the 2,400 range this week, it's still more than double that in January and nearly 70 percent higher than a year ago.A rising BDI indicates increased shipping demand, which means more commodities are being traded on the market and buyers are active in placing orders.
Freight rates for capesize ships also surpassed the US$35,000 threshold last week, their highest level in nearly six years.
"Increased shipping volume of iron ore and high demand of South American grains are pushing up the index," said Kim Young-ho, an analyst at Samsung Securities Co. " A slow fleet growth and a steady number of ship demolitions are also reasons behind the strong BDI." (Yonhap)