Shipowners Still Licking Wounds Despite Rally In Baltic Dry Index

The Baltic Dry Index closed at 908 Thursday, well above Decembers low of 666. Even so that is still 92% down from its all-time record high of 11,793 points set in late May 2008.

The index, which measures costs for shipping dry bulk commodities such as coal, iron ore, steel and grains is still trying to find its correct level, weighed down by a credit squeeze and waning demand for global trade.

Conditions may become clearer when China, the world's biggest importer of iron ore, completes price negotiations with suppliers for its new annual contract beginning February, some analysts say.

Others are not so optimistic. Last week, Great Eastern Shipping Co. Ltd, India's biggest private ocean carrier, cancelled orders for two new mid-sized dry bulk carriers it had placed with China's Cosco Shipyard Group.

The firm said it had cancelled the orders "with a view to reducing risk in the current highly uncertain business environment."

State-run Shipping Corp. of India Ltd (SCI), India's biggest shipping firm, has most recently laid up one more of its dry bulk carriers, the 12-year-old Maharashtra, that was due for dry docking and special survey. In December, SCI had laid up the 23-year-old dry bulk ship Lok Maheshwari, which was also due for dry docking and special survey.