Shipping companies are seeing better earnings prospects with transportation of steel and grains picking up, leading to buoyancy in the benchmark Baltic Dry Index (BDI). The BDI, bellwether of the global dry bulk market, has posted a substantial increase of 276 points since March 18.

On Wednesday, the index closed at 671 points. For Indian shipping companies, it means better demand and good earnings. In all, 60 bulk vessels owned by Indian companies will see brisk business in the coming days.

Anil Sharma, CEO, Essar Shipping, said the BDI is expected to rally till May-end with the start of the grain season in South America.

All Panamax ships have called on their ports. Some of the ships that were rested are back in business.

Steel prices are also firming up due to improvement in the Chinese economy. There is also good demand for Capesize and Panamax vessels, which is adding to the feelgood factor. Scrapping and mothballing of vessels also helped in increasing demand, he said.

Anil Devli, CEO, Indian National Shipowners' Association, said that despite the BDI going up, bulk operators are still not making money to take care of their operational expenses. “I am an optimist as the low BDI in February had put many jobs under threat and companies may have shut down if it had persisted. Today that fear has been alleviated to a certain extent and helped shipping companies to stay afloat,” he said.

Devli said that the surge in demand for commodities and consequent increase in freight is also aiding the improvement in the Baltic Dry Index.

Over the last quarter, cumulatively 943 vessels were scrapped. This brought some stability to the supply-demand equation in the market.

Vessels availability reduced slowly, resulting in demand for a certain class of ships. There are fewer orders for construction of bulk carriers, he said.

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