Baltic Exchange

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Mark Deluzio

This article is about the Baltic Exchange. For the Index of dry shipping costs operated by the exchange, see Baltic Dry Index (BDI)

The Baltic Exchange acts as the global marketplace for brokering shipping contracts. It is similar to the New York Merc in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. Unlike the publicly traded exchanges (NYSE, Chicago BOT, Chicago Merc, etc) the Baltic is owned and operated by the member buyers and sellers. In addition to this, the Baltic does not allow speculative players to trade on its exchange.^[1] The exchange maintains prices on several routes for different cargoes and then publishes its own index, the Baltic Dry Index (BDI), as a summary of the entire dry bulk shipping market. This index is very important as it can be interpreted as one of the more accurate leading economic indicators. It also shows where end prices are heading for items using the raw materials that are shipped in dry bulk.

History

After spending over 250 years at 30 St. Mary Axe in London, the exchange was the target of an Irish Republican Army terrorist attack. The operations moved to Lloyd's of London while renovations occurred. Once it was agreed upon that the site was far too damaged for a restoration, the exchange moved to its current residence next door at 38 St. Mary Axe.

Notes

1. ↑ http://www.balticexchange.com/default.asp?action=article&ID=2