The Baltic Dry index may have been drifting higher since touching record lows at the start of the year, but the overall deterioration in freight rates so far in 2016 has led one shipping business to post a painful update. Last Monday, Clarkson (CKN) said the "continuing imbalance between supply and demand in shipping and offshore" meant profit this year will be "materially" lower than 2015, when pre-tax earnings hit £31.8m.
The company faces two specific sets of challenges. While the recent recovery in the oil price to $50 a barrel has buoyed some activity in the offshore broking division, the broader industry remains depressed. The company's financial division has not fared much better against a backdrop of soft new building activity, weak investor confidence and quiet capital markets. The profit warning wiped more than a fifth off Clarkson's shares, ahead of the publication of half-year results on 15 August.
