The Baltic Dry is down 25% in the last 2 weeks, back near post-crisis lows, and has just suffered the worst start to a year in over a decade. (h/t Adrian)
The Baltic Dry is down 25% in the last 2 weeks, back near post-crisis lows, and has just suffered the worst start to a year in over a decade. (h/t Adrian)
Good tool for keeping track of the Baltic. We have never even come close to any kind of recovery since 08.
http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
Yes, but the Noah Wet Index (NWI) is up…consider shipping them two by two.
Jan 2012 looks just as anemic or worse; but magically with several trillion in fiat currency it all will go away.
Cheers
Hans Rupprecht, Commander in Chief
1st Saint Nicolaas Army
Army Group “True North”
No worries. Just the result of the huge increases in global warming causing the oceans to freeze over and trap the ships in harbor.
After the Global Warming induced Ice Age ends, shipping will return to normal.
Baltic Dry Index(BDI) is a tool not a ‘tell all’ about economic activity. It is measure of the supply of bulk carriers against the demand for those carriers. Many components make up this process. For example if new carrier supply comes to market it can cause an exaggerated drop in the index. The reverse is true if unexpected demand appears without capacity to fill it. In 2008 the index went from a all time high to a level that did not met the cost of operation. Obviously a over reaction.
One might ask how much shipping capacity is under construction, how much of that is already contracted and when is the delivery date? Containers are not factored into the BDI and yet are another significant indicator of manufactured goods movement vs bulk shipping.
As a Canadian I get more excited about the delay in pipeline approvals and the fact that Canada might have missed the boat in LNG plant construction and export in Rupert. Is shale gas a short term phenomena or not?
I doubt if these low shipping rates since 2008 have lead to a ship building boom. Most folks build with an eye to being able to sell at an increased price, not building with the idea they’ll only lose half their shirt with the increased capacity available.
What this tool tells me, is now is not a good time to start building / signing contracts to build container ships.
There has been a boom of sorts related, that of building houses from excess shipping containers. No shortage of that in the kijiji pages.
Which means that Mark Perry is blogging about house prices in San Jose.