Purpose of the Baltic Dry Index (Baltic Dry Index, abbreviation BDI), is the economic index of the shipping industry, it contains the transformation of dry bulk shipping industry's trading volume.
BDI the Baltic index is determined by the spot freight several main routes (Spot Rate) and weighted calculation, is reflected in the spot market prices, therefore, the freight price will affect the level of the index rise, therefore, assume now needs raw materials increase, said the national demand for cargo transport has also increased, in this case, or if the freight can be greater than the oil price rise in the cost, of course its profits can be maintained. In this context, BDI the Baltic index will rise, transportation stock prices will also rise; assume now raw materials demand is still increasing, but the increase in supply and broken cargo freight market, at this time BDI the Baltic index will fall, and of course transportation stock price will follow down, so the level of influence of freight than the raw material price is the key to affect shipping stocks profit.
The BDI index is always the bulk raw material freight index, bulk shipping to transport steel, pulp, grain, coal, ore, Phosphorite Ore, bauxite and other daily necessities and industrial raw materials. Therefore, bulk shipping operation status and the global economic boom and bust, raw material prices is closely linked. Therefore, the Baltic index can be regarded as a leading indicator of the economy.