Baltic Dry Index is a daily average of prices to ship raw materials. It represents the cost paid by an end customer to have a shipping company to transport raw materials across seas on the Baltic Exchange (global market place for brokering shipping contracts). This index can be used as an overall economic indicator as it shows where prices are heading for dry bulk items.
BDI is one of the purest forward looking economic indicators compared to most of the other economic indicators like consumer spending. BDI is devoid of speculators; only relevant parties can secure contracts. It shows actual supply and demand between who have cargo to move and those who have ships to move the cargo.
Let us look at the $BDI chart. If the BDI heads lower, it might be signaling the slowdown in economic recovery.
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