Just within a month, Baltic Dry Index (BDI) declined 58.2% from the 1,738 points on December 23, 11, the last trading day of 2011, to 726 points on January 27, 12, approaching to the record low of 663 points in January 2008. In the meantime, Baltic Capesize Index (BCI) and Baltic Panamax Index (BPI) also fell to 35 month low to 1,465 points and 815 points, respectively.

The index will stabilize in near term, with expectation that demand will recover after China ends new year holiday, said analysts. Although in the next few weeks, contracts from China are likely to be low, given sizeable inventories of iron ore and coal at Chinese ports. But the good news is demand in other Asian areas for Panamax carrier is rebounding.

For a longer term prospective, BDI will see a smaller rebound this year, properly between 1,000 points to 1,500 points, said GF securities, adding China's hugh iron ore import time will end as the government puts emphasis on steelmaking capacity control in its 12th Five-Year Plan and sovereign debt crisis in Europe is to continue to weigh on global economy.

Deutsche Bank predicts in its recent global shipping market report that carriers will expand 12% in 2012, versus the 5.1% growth in goods demands.