The Baltic Dry Index (BDI) is a daily ocean freight cost index issued by the London-based Baltic Exchange.
The BDI is a composite of the Capesize, Panamax and Supramax Timecharter averages.
It is reported across the globe as a “proxy” for dry bulk shipping stocks as well as a key indicator of the overall shipping market.
Every working day, a panel of international ship brokers presents the assessment of the current cost of freight on various routes to the Baltic Exchange. Routes must be representative, i.e. large enough in volume to be important for the overall market.
These rate assessments are then weighted together to create the overall BDI and size-specific Capesize, Panamax, and Supramax indices.
As dry bulk consists mainly of materials that function as raw material for the production of intermediate or finished goods such as cement, electricity, steel and food, the index is also seen as an efficient economic indicator of future economic growth and production.