Abstract
The aim of this study is to investigate empirically the relationship between the dry bulk freight markets and the prices of ‘major bulks.’ The relationship has not attracted much attention in the literature so far. However, changing commodity prices can influence the timing and quantity of imports and exports and, by extension, the volume of seaborne trade. In this context, many maritime practitioners tend to monitor the levels of commodity prices in order to obtain insights into the anticipated demand for bulk carriers. Therefore the examination of this relationship deserves further attention. The elements of our analysis consist of representative prices of coal, iron ore, and wheat, and Baltic Exchange indices that correspond to the most widely used vessel size for each commodity. In particular, we focus on the lead–lag relationship between each pair of variables, employing cointegration analysis, Granger Causality tests, and Impulse Response analysis. Our results imply the existence of a bidirectional relationship in the cases of iron ore and coal, while they indicate that wheat price leads the Baltic Panamax Index but the opposite is not true. These findings can support decision making in both dry bulk chartering and commodity trading.
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Appendix
Appendix
a. Positive shock to BCI, b. Negative shock to BCI
a. Positive shock to BCI, b. Negative shock to BCI
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Tsioumas, V., Papadimitriou, S. The dynamic relationship between freight markets and commodity prices revealed. Marit Econ Logist 20, 267–279 (2018). https://doi.org/10.1057/s41278-016-0005-0
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DOI: https://doi.org/10.1057/s41278-016-0005-0