Thursday, July 09, 2009

Baltic Dry Index lost another 15%

Baltic Dry Index, a leading indicator of shipments of commodities worldwide, lost another 15% this week to close at 3107 on Wednesday. This is another sign of weakening of commodities. 
Baltic Dry Index (BDI) has lost 27% since early June as commodities retreated after months of rally. CPO futures dropped 30% since May to close at RM2002 per ton on Wednesday. The benchmark September contract inched up this morning to RM2021 per ton.
Uncertainties over iron ore contracts with China, the world's biggest steel producer and buyer of more than half of all traded iron ore, also added to the pressures. China had initially sought a bigger price cut of up to 45% versus 2008.
Spot iron ore prices actually are already at their four-month high of above US$82 a ton delivered in China.
Thermal coal prices meanwhile under pressure again this week due to the fall of crude oil prices to below US$61 per barrel.
Indonesia is a major commodities player in the region, especially for CPO, thermal coal, rubber, and metal ores. Indonesia Stock Exchange (IDX) is also a commodity-heavy stock market.

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