BDI fell 13 times in a row, and the trend of commodities was under pressure

Since the beginning of December 2019, the Baltic dry bulk index (BDI), known as the barometer of global shipping, has fallen sharply. Data shows that as of February 4, 2020, the BDI index reported 453 points, showing a "13 consecutive falls" since January 17, and a new low since April 5, 2016. Analysts pointed out that due to Global trade downside risk and seasonal demand slowdown in bulk market, the continued decline of BDI in the future is still an approximate rate event, and the trend of bulk commodities will continue to bear pressure. Since January 17, BDI has continued to decline, from 768 to 453, down more than 41%. From the perspective of historical data, BDI has not performed well at the beginning of each year in recent years. In 2017 and early 2018, BDI experienced periodic decline, but the decline in 2019 and early 2020 is more significant. According to the report issued by the World Trade Organization (WTO) in mid October 2019, the latest forecast for the growth rate of global commodity trade in 2020 is 2.7%, 1.5 percentage points higher than the expected growth rate in 2019. According to the report, the downside risk of Global trade is still very high, and the situation in 2020 depends on whether the trade tensions can be eased and whether the trade relations of major economies can be restored to a normal state.

As a barometer of commodity activity, the trend of BDI tends to appear a turning point one month before that of commodities. Since the beginning of January 2020, the CRB index, which reflects the trend of international commodity prices, has declined by more than 10%. According to the data released by billion Hailan, a big data provider of domestic shipping, since 2020, the global shipping volume of soybeans and coal has been significantly lower than that of the same period in 2019, while the global shipping volume of iron ore is not significantly different from that of the same period in 2019, while the total shipping volume of crude oil is significantly higher than that of the same period in 2019. The volume and price of the above-mentioned goods are very important to the shipping market. The global transportation of industrial materials represented by iron ore and coal is mainly completed by the Capesize ships with a capacity of more than 100000 tons. The spot freight change of such ships accounts for 40% of the BDI change. Jing Chuan, deputy general manager of Zhongda futures, said that as a leading indicator of the global economy, the operation trend of BDI is usually reflected in the projection of global demand on trade, which to some extent reflects the operation trend of the economy. BDI recently fell 13 times in a row, reflecting the weakness of Global trade and downside risks.

He further analyzed that as the world's second largest economy, China plays an important role in Global trade and global demand. As for bulk commodities, due to the rapid sinking of consumption, it is difficult for the demand side to support the market, so it is inevitable that the price will decline. The decline of BDI is in the same logical relationship with the decline of commodities. To some extent, the decline of BDI is mutually verified with the decline of commodities, and it also has an impact on the expectation and market psychology of commodity market. According to the past law, after the Spring Festival, China usually enters the peak consumption season of industrial products, which is often an important supporting factor for the recovery of BDI trend. However, there is uncertainty about whether BDI can recover in 2020. Looking forward to the future, Jingchuan analysis, in order to prevent and control the epidemic, some enterprises in China have taken shutdown measures. On the one hand, the rapid decline of BDI is the result of the sharp decline of transportation orders; on the other hand, because of the trading characteristics of the index, the panic mood is relatively obvious on the index, which will naturally spread to the commodity market, causing the decline of commodity prices. "Commodity prices and the global commodity transport index are mutually validated and influenced. Under the current situation, the short-term downward pressure on the production and demand of the global economy will inevitably lead to the decline of Global trade, and the continuous pressure on BDI index is inevitable. " Jingchuan said.