| Summary: | Fluctuations of freight income and volatility of bunker prices are together having an important impact on shipping profits because oil, which is the main source of bunker fuel, constitutes substantial operational expense to shipping firms, and it accounts for 34-44% of the whole operation costs. However, as the freight rates in live marketconditions are determined by demand, the determinative characteristics of bunker priceloses its importance. In this respect, it is not wrong to say that the relationship betweenbunker prices and freight rates changes according to time. Therefore, with the aim offilling the gap in the related literature, the relationship between these two variables isexamined by time-variance causality analysis. The data set used in the study consists of318 observations on a monthly basis covering the period January 1992 to June 2018. Asa result of the study 24 causality periods with lengths ranging from 1 month to 13months are determined. Also, it is spotted that they are intersected with BDI in thedeclining regions of the index in general and this result confirms that the causalitybetween the freight rates and the bunker prices is realized in the stagnant marketconditions.
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