Chart of the Week: Global shipping activities take a pause

The Baltic Dry Index (BDI) gauges the volume of shipping activities across the globe. As a daily index, it is a useful, timely indicator to assess global economic activity.

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Throughout the month of January, the BDI tumbled by over 55%, hitting its trough on 11 February 2020. The index was last lower in 2015–16, when according to Fathom’s measure of underlying economic activity China’s economy was also slowing sharply. This latest downturn, which is on the back of a normalisation following the sharp uptick in global sentiment over the first half of  2019, shows the impact of the COVID-19 outbreak, which has caused delays to supply chains across the world. In an attempt to control the spread of the virus, many workers in China, have remained away from factories, and controls on borders have made trade more difficult. This has disrupted the global supply chain, resulting in fewer parts being shipped across the world. Even the larger corporate global players, such as Apple who issued a profits warning this month, have been affected by the distruption to the supply chain. Despite this, as factories have started to reopen, we have seen a slight uptick in the index in the past week, suggesting an increase in shipping activity.

For more information and analysis on the implications of COVID-19, please see our new Refinitiv Eikon page, found on the Chartbook section of the COVID-19 app.

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