The Baltic Dry Index - a key measure of the shipping cost of the world's commodities - has plunged to an all-time low. This is likely the effect of China's weakening economic growth slowing the demand for iron ore, which is used to make steel. The index slumped to just 504 points, compared with 11,793 at its peak in May 2008.
This is bad news for shipping companies Braemar Shipping Services (BMS) and Clarkson (CKN), who ship commodities, including oil and iron ore, across the globe. Shares in Clarkson have fallen by around fifth over the last three months. In the group's latest trading update management said the dry bulk market - which includes iron ore - remained "severely depressed", while the low oil price continued to put offshore operators under significant pressure. This has resulted in "contract slippage and cancellation". However, Braemar has held up better, benefitting from its takeover of formerly-Aim-listed group ACM Shipping. Its shipbroking division has boosted the volumes of crude oil it transports and the miles travelled.
