Baltic Dry Index. Source: Lloyd’s List. The Baltic Dry Index (BDI) is a measure of the price of shipping major raw materials such as metals, grains, and fossil fuels by sea. It is created by the London Baltic Exchange based on daily assessments from a panel of shipbrokers. The BDI is a composite of 3 sub-indices, each covering a different carrier size: Capesize, Panamax, and Supramax. Capesize carriers are the largest ships with a capacity greater than 150,000 DWT. Panamax refers to the maximum size allowed for ships traveling through the Panama Canal, typically 65,000 – 80,000 DWT. The Supramax Index covers carriers with a capacity of 50,000 – 60,000 DWT.
The following R codes would generate the following charts:
chartSeries(Baltic_Index, subset=’last 12 months’)
Baltic Index in last 12 months – Baltic Index is rising.
The following chart shows the changes from previous year (365 days ago)
fit <- arima(Baltic_Index, order=c(2, 0, 1))
# predictive accuracy
# predict next 5 observations
The following chart shows the projection for next 365 days with ARIMA (2,0,1) model