Baltic update

 

Both of these measures of the cost of shipping bulk commodities have been quite volatile in the past year or so. Both fell to extremely low levels late last year as global trade ground to a halt, only to rebound sharply in the first half of this year. Since July both have been weak; economic bears point to that weakness as a sign that the recovery is fading, while I think it fits in the category of random noise. As these charts show, both indices are still relatively elevated from an historical perspective, and I don't think they are inconsistent at all with an ongoing global recovery. Plus, commodity prices remain quite close to their recent highs.