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The main driver of the 2005-09 surge in the BDI was linked to commodity prices, particularly oil. The index then plummeted back to historical levels and has remained weak. Many ships that were ordered during the "bubble years" have entered the market, providing capacity growth above demand growth. Bunker fuel accounts for about 40% of vessel operating costs with limited opportunities to mitigate them. Thus, a surge in oil prices is directly reflected in shipping rates, and if energy prices drop, the BDI can also drop. More at www.chpc.biz

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