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Baltic Dry Index Nosedive

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Re: Baltic Dry Index Nosedive

Unread postby mcgowanjm » Mon 28 Dec 2009, 09:47:30

TheAntiDoomer wrote:Commodity Shipping Index Posts Biggest Annual Gain on Record

http://www.businessweek.com/news/2009-1 ... ecord.html

Shipping costs rebounded this year, after plunging a record 92 percent last year, as the global economy recovered from its deepest recession since World War II. China, the world’s biggest consumer of iron ore and coal, spent $586 billion to stimulate its economy. The two commodities are the biggest cargoes carried by ships included in the Baltic Dry Index.

“Next year is going to be a better year than a lot of people expect, but a lot depends on Chinese demand continuing,” said Michael Gaylard, strategic director at Freight Investor Services Ltd., a London-based derivatives broker.


BWAHAHAHAHAHA :twisted: :twisted: 8O 8O :roll: 8)

http://www.investmenttools.com/futures/ ... _index.htm
after plunging a record 92 percent last year
you
can have a record gain and still be down over 70%!

Meanwhile, in the real world:
Dec 22, 2010
The next morning, Arrow Trucking suspended its operations, shuttered its Tulsa headquarters, and shut off its fuel cards, leaving some of its 1,400 or so drivers stranded around the country with no fuel to get back home. Now back in Macon, Ga., Cruthis and dozens of other truckers have banded together to help their stranded bretheren.
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Re: Baltic Dry Index Nosedive

Unread postby the48thronin » Mon 28 Dec 2009, 22:48:51

This is interesting: link
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Re: Baltic Dry Index Nosedive

Unread postby copious.abundance » Tue 02 Mar 2010, 01:25:50

Yessiree, global trade is a-comin' back! :-D LINK
Rapid global trade recovery continues By Alan Beattie in London, updated: March 1 2010 21:03:

Global trade in goods has continued to bounce back rapidly from its huge fall a year ago, with an authoritative index recording the fastest monthly increase in December in its 19-year history.

Data from the Bureau for Economic Policy Analysis, a Dutch research institute, suggest that little permanent damage has been done to the world trading system by the financial crisis.

The bureau’s widely watched composite index said that the volume of goods trade worldwide rose at 4.8 per cent in December. The less volatile three-monthly measure also rose by a record rate in the fourth quarter of last year, finishing 6 per cent higher than in the third quarter.

Richard Baldwin, professor of international economics at the Graduate Institute in Geneva, said that the rapid recovery suggested that it was largely a fall in demand that had caused trade to contract. [...]
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Baltic Dry Index Nosedive

Unread postby zoidberg » Mon 26 Apr 2010, 21:31:01

Looks to me like the index is quivering around a new equlibrium, but better than before for sure.
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Re: Baltic Dry Index Nosedive

Unread postby copious.abundance » Fri 20 Aug 2010, 15:09:44

LINK
Baltic Dry Index Jumps 36% in Two Weeks as China Lifts Iron Ore
By Alaric Nightingale

Aug. 20 (Bloomberg) -- The Baltic Dry Index, a measure of commodity shipping costs, had its biggest two-week gain in 14 months as Chinese iron ore buying extended a surge in charter rates for vessels that carry the steelmaking raw material.

The gauge jumped 4.2 percent today to 2,756 points, according to the London-based Baltic Exchange. It’s climbed 36 percent in the past two weeks, the largest fortnightly advance since June 2009. Charter rates for iron-ore carrying capesizes had the largest increase today, rising 8.9 percent to $34,913 a day.

Chinese steelmakers “are replenishing the stocks they destocked,” Amrita Sen, an analyst Barclays Capital in London, said by phone today. While inventories of iron ore at Chinese ports stand at a near-record 76.8 million metric tons, mills themselves “destocked massively” during the past several months, she said.

The Baltic Dry Index has now climbed 40 percent in August while capesize charter rates have more than doubled, according to the exchange. The rising demand is enabling owners to overcome the effects of a fleet that’s expanding at about twice the speed of seaborne trade in commodities.

[...]
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Baltic Dry Index Nosedive

Unread postby eXpat » Tue 11 Jan 2011, 22:08:42

Shipping Rates Poised to Plunge 32% on Glut Off Australia: Freight Markets
A 20-mile-long line of commodity carriers off Queensland, suffering its worst floods in a half- century, means less income for owners already reeling from the biggest slump in freight rates in more than two years.

There are 132 vessels floating off the Australian state, which accounts for about 50 percent of the global seaborne supply of coal used in steelmaking, data collected by AISLive and compiled by Bloomberg show. Ships will wait at least 22 days to load, the longest delays since April, according to Truro, England-based Global Ports, which tracks the industry.

While congestion would normally boost freight rates by tying up vessels, mine closures could spur shippers to order carriers to leave and compete for new orders, said Amrita Sen, an analyst at Barclays Capital in London. Should the flooding persist, the Baltic Dry Index of shipping costs may drop as much as 32 percent to 1,000 points in the coming months, she said.
...
Rates for capesizes, the biggest components in the Baltic Dry Index, plunged 36 percent to $12,897 a day last week, the most since October 2008, according to data from the Baltic Exchange. Tariffs fell another 13 percent to $11,266 this week. The bourse in London’s financial district publishes daily assessments for more than 50 maritime routes.

http://www.bloomberg.com/news/2011-01-12/shipping-rates-poised-to-plunge-32-on-glut-off-australia-freight-markets.html
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Re: Baltic Dry Index Nosedive

Unread postby eXpat » Thu 13 Jan 2011, 16:38:56

Still on its way down, check the links, it looks like is going to 2008 levels
http://investmenttools.com/futures/bdi_baltic_dry_index.htm
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND
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Re: Baltic Dry Index Nosedive

Unread postby Outcast_Searcher » Thu 13 Jan 2011, 16:54:03

eXpat wrote:Still on its way down, check the links, it looks like is going to 2008 levels
http://investmenttools.com/futures/bdi_baltic_dry_index.htm
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND


So what? We obviously have a global commodity boom overall (which may be caused by easy money in many cases, but still).

The BDI is extremely volatile. Trying to cherry pick this as a sign of financial doom when things like copper and crude oil and many soft commodity prices are strong seems pretty silly to me.

If the BDI stays lower than this for a year, then it might be worth noticing.

If you want to preach doom, root for continued housing and employment and debt issues - there are plenty of real negative economic signals that bear watching.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Baltic Dry Index Nosedive

Unread postby eXpat » Thu 13 Jan 2011, 17:25:00

Outcast_Searcher wrote:If you want to preach doom, root for continued housing and employment and debt issues - there are plenty of real negative economic signals that bear watching.

Is not that a FACT? have a look at the graphs again, and I would hardly call it volatile, it has been pretty consistent last years unlike the stock market for instance, or are you just trolling around?
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Re: Baltic Dry Index Nosedive

Unread postby Outcast_Searcher » Fri 14 Jan 2011, 05:22:01

eXpat wrote:
Outcast_Searcher wrote:If you want to preach doom, root for continued housing and employment and debt issues - there are plenty of real negative economic signals that bear watching.

Is not that a FACT? have a look at the graphs again, and I would hardly call it volatile, it has been pretty consistent last years unlike the stock market for instance, or are you just trolling around?


Are you talking about the BDI on planet earth and the first world stock markets?

The BDI was above 11,000 in spring of '08. It was above 4,000 in July of '10 -- both according to your graphs. The last reading shown was below 1500.

The past 22 months, the US stock market has trended upward at a moderate pace -- a VERY moderate pace compared to the wild swings of the BDI.

Do you know what volatility is? If so, HOW can you call the BDI "consistent" compated to "the stock market"?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Baltic Dry Index Nosedive

Unread postby Cid_Yama » Fri 14 Jan 2011, 10:47:33

Look at the 5 yr on the interactive. Last time the BDI was this low. Containers started stacking up on the docks as it was no longer profitable for the ships to run. Ships anchored up in ports worldwide.

Letters of credit dried up as no one wanted to back shipments that barely covered costs.

Although it's true that the BDI covers bulk cargoes, it is a leading indicator of the entire global shipping industry and the global economy as a whole.

An important thing to note. Many ships were scrapped after the bottom in 2008. Shipyards went out of business. New construction came to a halt. The reduction in available ships should have caused the index to rebound. The fact that it is now below 1500, reflects that there is a fall off in global demand even for the fewer ships that are left.
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Re: Baltic Dry Index Nosedive

Unread postby Armageddon » Tue 25 Jan 2011, 12:47:15

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Re: Baltic Dry Index Nosedive

Unread postby Newfie » Tue 25 Jan 2011, 15:03:13

You really need to move that over to the 5-year time scale to get a sense of what it is doing.

This one has a 10-year span, even better.

http://investmenttools.com/futures/bdi_ ... _index.htm

At first I thought "Oh boy, here we go again." But in reading the ariticle it seems that they are attributing the decline not to a lack of produce to move but to a glut of new cape size ships. (IIRC - A capesize is too be to fit through the Panama Canal.)

So this may not be as bad as it looks. I wonder if it is a unintended condition of all that low interest money flowing around. Money is cheap so, yards are hungry, so why not build some ships now and have them around for when the market heats up?
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Re: Baltic Dry Index Nosedive

Unread postby Daniel_Plainview » Thu 27 Jan 2011, 09:35:16

Baltic Dry Index in Freefall

Image

Baltic Dry Index 187 Away From Triple Digits

Submitted by Tyler Durden on 01/27/2011 08:23 -0500

The freefall in the BDIY is just ridiculous: following a steep plunge it has now gone in freefall, and is down 3.9% overnight to 1,186. And to all who are claiming that the index is merely indicating a supply glut from the onslaught of new ship arrivals, well the entire orderbook (in progress) has been public and transparent - to claim it is a surprise is about as "naive" as stating that 5 computers and a bunch of NYU kids control the US stock market. As for how much longer it will keep dropping? Well: he post Lehman low was 663. There is still a lot of pain. Especially if one is a non-chartered dry bulk shipper... With leverage.


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Re: Baltic Dry Index Nosedive

Unread postby JohnRM » Mon 09 May 2011, 16:50:21

The BDI didn't nosedive, it just never really recovered to pre-recession levels. We're pretty much right back where we were in 2006. As Officer Barbrady would say; "Move along now. Nothing to see here."
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Re: Baltic Dry Index Nosedive

Unread postby ralfy » Tue 17 Jan 2012, 08:36:40

Deserves a bump? BDI just dropped again, close to both 2009 and 2002 levels:

http://investmenttools.com/futures/bdi_ ... _index.htm
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Re: Baltic Dry Index Nosedive

Unread postby ralfy » Tue 17 Jan 2012, 08:40:25

JohnRM wrote:The BDI didn't nosedive, it just never really recovered to pre-recession levels. We're pretty much right back where we were in 2006. As Officer Barbrady would say; "Move along now. Nothing to see here."


Gee, thanks for that worthless point.
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Re: Baltic Dry Index Nosedive

Unread postby Newfie » Tue 17 Jan 2012, 08:53:47

Thanks for the bump. Worth watching.

Seems to be a combination of lower shipping and new ships coming on line.

Which would indicate a slowdown in shipbuilding as well?

That too would tend to push the global economy downward.
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Re: Baltic Dry Index Nosedive

Unread postby eXpat » Sat 21 Jan 2012, 11:21:50

"I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it."
George Bernard Shaw

You can ignore reality, but you can't ignore the consequences of ignoring reality.” Ayn Rand
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Re: Baltic Dry Index Nosedive

Unread postby Cid_Yama » Sat 21 Jan 2012, 11:53:59

The cheap labor overseas is disappearing.

China province raises minimum wage by 23%
Sichuan province in southwest China has increased the minimum wage sharply to try and attract workers amid a rapidly rising cost of living.

Sichuan raised the minimum monthly wage by 23.4% starting on 1 January, state news agency Xinhua said on Thursday.

That is one of the biggest increases, with most other provinces raising wages in line with government advice of 13%.

Severe labour shortages in Chinese cities have prompted wage rises in many provinces this year and last.

link

A total of 21 regions across China adjusted their minimum wage standards in the first three quarters of the year, with an average overall increase of 21.7 percent year-on-year, the Ministry of Human Resources and Social Security revealed Tuesday.

By the end of September, 21 provincial-level regions, including Beijing, Tianjin and Shanxi had adjusted their minimum wages, Yin Chengji, the ministry's spokesperson, told a press conference Tuesday.

According to him, 25 provinces in total have issued guidelines for this year's wage increase, setting the baseline of wage growth to above 14 percent year-on-year.

link

Globalism wasn't onesided, favoring the employer. It is resulting in higher wages worldwide. Costs are now approaching parity with domestic production.

Those exploitable peasants are getting harder to find.

There have been massive labor protests across China since November.
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