The Baltic Dry Index is the index price for several types of container ships. The index price is very sensitive to global economic activity and the level of international trade. An increase in international trade increases the index price and a decrease in international trade decreases the index price. At the height of the housing bubble the index traded over 11,000 and most recently sank to historic lows near 608. The index is down 45% over the last year and 22% since the beginning of the year. The supply of shipping capacity is increasing but it clear that contracting global economic activity and international trade is driving the index lower. The Index is now lower than in 2008 and at levels not seen in many years.
Image source: HO/Reuters/Corbis
