The Baltic Dry Index is a key indicator in the global shipping market. This index, reported in USD, is provided by the London-based Baltic Exchange and represents the price of moving major raw materials by sea. The index is not restricted to Baltic Sea countries and takes into account 23 shipping routes for four different carrier sizes. These ships are known as dry bulk carriers, and transport commodities such as building materials, coal, metals and grains around the world.
Why do I bring up this index? Because economists and stock market investors both pay attention to it, and so we should at least have some idea of what they're looking at and how they interpret the data.
Ultimately, this index measures the supply and demand forces behind large scale shipping of commodities. The supply and demand forces coalesce into pricing data which can provide insight into the state of the global economy.
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