Welcome to Francis Academic Press

Academic Journal of Engineering and Technology Science, 2020, 3(5); doi: 10.25236/AJETS.2020.030518.

Analysis of correlation and influence degree between BDI index and fluctuation of transport capacity index

Author(s)

Jinming Ren

Corresponding Author:
Jinming Ren
Affiliation(s)

College of Transport & Communications, Shanghai Maritime University, Shanghai 201306, China
[email protected]

Abstract

The Baltic Dry Index (BDI) is a barometer of the international dry bulk shipping market, the changes of BDI volatility related to many factors, which are greatly influenced by supply and demand side. In order to explore the correlation of BDI and the capacity index, the monthly data of Baltic dry index (BDI) and fleet capacity index from January 2014 to May 2020 were chosen as samples to establish VAR model, using Granger causality test, impulse response and variance decomposition methods to explore the causation and influence degree of them. It is concluded that used ship trading trading is the main reason that affects the fluctuation of BDI index, and the fluctuation of BDI index in turn will affect the capacity of demolitions and new shipbuilding orders, which provides a basis for shipping enterprises to adjust the capacity and effectively avoid operational risks.

Keywords

BDI index, capacity supply, VAR model, Granger causality test, variance decomposition

Cite This Paper

Jinming Ren. Analysis of correlation and influence degree between BDI index and fluctuation of transport capacity index. Academic Journal of Engineering and Technology Science (2020) Vol. 3 Issue 5: 142-151. https://doi.org/10.25236/AJETS.2020.030518.

References

[1] Li Jing, Wang Wei. Baltic Dry Bulk Freight Price Index Volatility Study - Analysis based on ARMA-GARCH Model [J]. Price Theory and Practice, 2015 (1): 82-84.
[2] Yang Hualong, Liu Jinxia, Fan Yonghui.Baltic Dry Bulk Freight Price Index Volatility Study[J].China Sailing, 2011 (3): 84-88 plus 102.
[3] Chen Lifen, Xie Xinlian, Sang Huiyun, etc. Correlation Analysis of Dry Bulk Freight Prices and Fuel Prices Based on SVAR Models [J]. Dalian Maritime University Journal, 2016 (4): 119-124.
[4] Li Ruihua, Song Yuliang. The Influence factorof of the maritime price index based on the co-integration theory [J]. China Maritime, 2014 (3): 123-126.
[5] Liu Bin, Liu Chao, Wanzhu, etc. Correlation between the BDI Index and the Shanghai Composite Index[J].Dalian Maritime University Journal, 2010 (3): 37-40.
[6] XU J, YIP T L, MARLOW P B. The dynamics between freight volatility and fleet size growth in dry bulk shipping markets [J]. Transportation Research Part E:logistics and transportation review, 2011 (6): 983-991.
[7] RUAN Q S, WANG Y,LU X S, et al. "Cross-correlations between Baltic Dry Index and crude oil prices. [J]. Physica A: statistical mechanics and its applications, 2016 (7): 278-289.
[8] Wang Dashan, Liu Wenbai. International Dry Bulk Shipping Market Development and BDI Index Prediction Research - Analysis Based on the Joint Equation Model [J]. Price Theory and Practice, 2018 (6): 78-81.