Another trying year awaits shipping and freight group Grindrod after the Baltic Dry Index - a key measure of the cost of moving commodities by sea - dropped to a record low this week. The sharp drop in the closely watched gauge has cast a shadow over the company's earnings prospects and driven the share price to its lowest level in more than seven years.Grindrod is feeling the effect of slowing global growth, particularly in China, where it has generated fat margins by shipping dry bulk commodities such as iron ore.Most of the steel-making commodity mined in South Africa is exported, with the bulk of the exports destined for China.China is also making the transition from an infrastructure-investment-led economy to a consumption-driven one, which implies less demand for commodities.This shift in China has affected the bottom line of most South African mining companies, which in turn has had a knock-on effect on Grindrod.story_article_left1Assore is one such mining company feeling the squeeze, with half-year headline earnings expected to fall 44%, according to its trading update this week."Grindrod will remain under pressure if the oversupply in shipping capacity persists, China slows down further and commodity prices remain low due to a combination of oversupply and weak demand," said Victor von Reiche, a portfolio manager at BayHill Capital.The world's second-largest economy logged its lowest annual growth rate in 25 years in 2015 - and the lower-growth trend is set to continue.What is more, the Grindrod freight division is vulnerable to the South African economy, which is predicted by the International Monetary Fund to grow less than 1% this year.The Durban-based company is exposed to the productive sectors of the local economy, such as mining and manufacturing, which are battling poor market conditions - despite the weaker rand that should benefit exporters."While the freight and financial services divisions are less cyclical, the reality is that the group's prospects remain intricately linked to buoyant economic activity," Von Reiche said.Last year the company's headline earnings in the six months to June were up a mere 2%, to R327.9-million. Results for the year to December will be released next month.story_article_right2Grindrod occupies a vital spot in the local economy, running terminals, port operations and rail. It transports vehicles in southern Africa for a number of South African car manufacturers and importers.The current drought, which is expected to severely cut summer crop production, will likely affect the company's agricultural logistics business.However, while the operating environment appears unappealing at the moment, analysts believe the share price decline provides a good entry point for investors with a long-term investment horizon.The share price briefly dipped below a R10 a share for the first time since 2008 this week, having lost more than 60% of its value since peaking in 2014."We think on the normalised basis, the share price is worth between R18 and R20," said Olof Bergh, analyst at Sanlam Private Wealth, who added this hinged on improved profitability in the shipping business and an uptick in global commodity markets.Grindrod declined to comment as it is in a closed period ahead of the release of its annual results...