Source: Bloomberg. (Continuous Commodity Index: http://www.bloomberg.com/quote/CCI:IND ; Baltic Dry Index: http://www.bloomberg.com/quote/BDIY:IND). Monthly data is as of the first trading day of the month. Note: 2000 = 100.

Continuous Commodity Index and Baltic Dry Index, 2000-2012

The Continuous Commodity Index (CCI) is a composite index of 19 commodity futures prices published by the Commodity Research Bureau (CRB). The index was originally developed in 1957 and continues to be one of the most often cited indicators of general commodity prices. It thus is a good proxy for investigating macroeconomic trends in the commodity sector and inflation expectations in the near future. The Baltic Dry Index (BDI) is an assessment of the average price to ship raw materials (such as coal, iron ore, cement and grains) on a number of shipping routes and by ship size. It is thus an indicator of the cost paid to ship raw materials on global markets and an important component of input costs.

In recent years, the BDI has experienced much volatility and has climbed much faster than the CCI, which implies that in relative terms the cost of shipping bulk commodities has grown faster than for commodities. A major reason is that new transport capacity is difficult to bring online when the demand for commodities rises. There is thus a comparative cost incentive to consider containerization as an alternative. The collapse of the BDI and the CCI in late 2008 and early 2009 has placed bulk shipping rates more in line with the conventional relation with commodity prices. From 2010 a new diverging pattern is being observed as commodity prices remained in a high range while the BDI tanked to lows not seen in a decade. It remains to be seen how this relation will unfold but the volatility of bulk shipping rates is in contract with the relative stability of container shipping rates.