KUALA LUMPUR (April 26): Interest in the dry bulk shipping segment, a sector that has been off the radar for more than a decade, is getting strong, against the backdrop of surging freight rates driven by an unexpected commodity boom during the Covid-19 pandemic.
The Baltic Exchange Dry Index, which tracks freight rates across different vessel sizes, started the year higher than pre-pandemic levels, and is currently double its five-year average at 2,472 points as key markets replenish supplies that were drawn down in the year of the pandemic.
Shares of dry bulk carriers, from Thai-listed Thoresen Thai Agencies PCL to Hong Kong-listed Pacific Basin Shipping Ltd, have risen between 63% and 153% in tandem with the bullish charter rates.
Freight rate spike puts dry bulk carriers back in spotlight
Interest in the dry bulk shipping segment, a sector that has been off the radar for more than a decade, is getting strong, against the backdrop of surging freight rates driven by an unexpected commodity boom during the Covid-19 pandemic.
The Baltic Exchange Dry Index, which tracks freight rates across different vessel sizes, started the year higher than pre-pandemic levels, and is currently double its five-year average at 2,472 points as key markets replenish supplies that were drawn down in the year of the pandemic.
Shares of dry bulk carriers, from Thai-listed Thoresen Thai Agencies PCL to Hong Kong-listed Pacific Basin Shipping Ltd, have risen between 63% and 153% in tandem with the bullish charter rates.
Why is rate of inflation accelerating? For example, just looking at the Brent crude oil price and retail pump prices in the second quarter of of 2020 and this year, prices of Brent crude have almost doubled while RON95 presently retails at RM2.05 per litre, although capped, is almost 50% higher than a year ago.
THE Malaysia Consumer Price Index (CPI) for the month of March was a surprise as the headline 1.7% reading was ahead of market forecast of 1.6% jump.
As we are now into the 2Q period, it is likely that inflation reading will be elevated as Bank Negara Malaysia (BNM) itself has highlighted this fact.
By Jim Iuorio, for CME Group
AT A GLANCE
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The important question is: does the meteoric rally in commodities reflect a belief that the coming economic recovery is going to be explosive? Or are these rallies a function of inflation fears and a waning belief in the U.S. dollar and its global hegemony in coming years? The answer is likely a bit of both and digging deeper into the moves of individual commodities could give us some cl
Gold records best week since December last year
Bloomberg
Gold posted its best week since December last year amid a retreat in bond yields and a report that top buyer China might import more of the metal.
After weeks trading in a narrow range, gold has advanced as US Treasury yields and the US dollar posted weekly losses. Lower yields boost the appeal of bullion, which does not offer interest. US dollar declines helped spur a broad rally in raw materials, with the Bloomberg Commodity Index also posting its best week of this year.
Bullion is showing tentative signs of breaking out of a slump following three straight monthly losses. Prices rose above the 50-day moving average on Thursday, a positive signal for traders who follow chart patterns.