Baltic Dry Index remains weak

Baltic Dry Index, a leading indicator for commodities market, remains weak and closed lower at 1975 on Monday. The decline is only 10 point from last week's closing of 1985. But that reflects an overall weakness in the commodities market.

BDI has dropped 35% from early June 2009, which somehow reflected the retreat in most commodities. Palm oil, for example, has surged closer to RM3000 per ton in May, but this morning the benchmark September 2009 delivery in Malaysia Derivatives Exchange is traded around RM2039 per ton. It is improved from RM1990 per ton on Monday. But the current price is already 35% below its recent peak.

Metals are mainly weak. Monthly prices of nickel have inched up from the year's low of around US$5 per pound to above US$7 per pound. But the metal retreated in recent weeks to below US$7 per pound as it remains unclear whether the stainless steel industry, which consumes two-thirds of global nickel production, will improve significantly in the coming months. 

Prices of nickel have tumbled from an annual average of US$16.87 in 2007 to an annual average of US$9.57 in 2008 to an annual average of US$5.3 per pound so far this year.

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