"Nothing Is Moving," Baltic Dry Crashes As Insiders Warn "Commerce Has Come To A Halt"

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OddTrader

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"Nothing Is Moving," Baltic Dry Crashes As Insiders Warn "Commerce Has Come To A Halt"

Submitted by Tyler Durden on 01/11/2016 13:05 -0500

http://www.zerohedge.com/news/2016-...-crashes-insiders-warn-commerce-has-come-halt

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If true, this would be catastrophic for world trade. Even if it’s not true, shipping is still nearly dead in the water according to other indices. The Baltic Dry Index, an assessment of the price of moving major raw materials by sea, was already at record all-time lows a month ago... and in the last month it has dropped even more, especially in the last week. Today BDIY hit 415...

UQ
 
It's over capacity in the shipping market. The Baltic index is not the world's pulse.

ZH said:
We checked VesselFinder.com and it appears to show no ships in transit anywhere in the world. We aren’t experts on shipping, however, so if you have a better site or source to track this apparent phenomenon, please let us know.
More...

This is the danger of ignorance. AIS tracking is limited to coastal areas. To say there are "no ships in transit anywhere in the world" is laughable and the epitome of not understanding your subject matter.
 
War is good for the economy....bad for everything else. A world war would send that line on the chart up. 'Course a lot of ships might sink too.
 
Sooo... China was waiting for the US recovery, the US had one state, Texas, that was generating all the new jobs, then Oil crashed and took Houston with it... The Obamuzzie legacy, the one about the recovering economy, wow, I've been tracking the bs MSM reports against the BDI all along and there never was any evidence for a recovery.
 
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Bleeding Continues for Korean Shipbuilders on Hyundai Heavy Loss
http://www.bloomberg.com/news/artic...for-korean-shipbuilders-on-hyundai-heavy-loss
26 Oct 2015

South Korea’s shipbuilding industry continued to reel from a failed international expansion and a slump in demand for new vessels, as the world’s biggest shipbuilder reported a net loss seven times as large as estimated.

Hyundai Heavy Industries Co. posted a net loss of 434.1 billion won ($383 million) in the third quarter, it said in a statement Monday. That’s wider than the 61 billion-won loss forecast by analysts, according to the average of 10 estimates. Its operating loss totaled 678.4 billion won, compared with estimates for a loss of 14.6 billion won.

... ...

UQ



Another news today: Offshore facilities???

Q
http://www.hellenicshippingnews.com/s-korean-shipbuilders-cut-3000-jobs-last-year-amid-slump/

S. Korean Shipbuilders cut 3,000 jobs last year amid slump

in Shipbuilding News 12/01/2016


South Korean shipyards, led by Hyundai Heavy Industries Co., slashed their workforces by some 3,000 in 2015 as they struggled with mounting losses stemming from a delay in the construction of offshore facilities and an industrywide slump, industry data showed Monday.

According to the data, some 3,000 employees were let go by the country’s top three shipyards — Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. — last year.

Including workers at their subcontractors, a total of 5,000 jobs were cut last year, the data showed.

... ...

UQ
 
Last edited:
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2015/03/24
Shipowners must consolidate, says Ross
http://nicosiamoneynews.com/2015/03/24/shipowners-must-consolidate-says-ross/

Mr Ross was speaking on Monday at the annual Capital Link Shipping Forum in New York, which heard numerous complaints about how investors ploughed money into buying new ships when they entered the industry after its slump in 2009. The effect was to add to already significant oversupply in both tanker and dry bulk shipping.

Rates for most forms of tankers dropped last year, while dry bulk rates have this year reached some of their lowest ever levels. Despite a modest recovery, average spot-market rates for a Capesize — the largest commonly used dry bulk vessel type — are roughly $6,000 a day, below operating costs of $6,500 and other daily costs including financing of about $13,000.
UQ
 
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There are growing doubts about what the Baltic dry is actually signalling (Jul 14th 2010)
http://www.economist.com/blogs/newsbook/2010/07/shipping_rates_slump


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There are growing doubts, however, about what the Baltic Dry is actually signalling. The confusion is whether the index is saying more about the supply of ships than the demand for their cargoes. The index spiked dramatically in 2008 as China's imports of hard commodities soared at a time when the supply of ships was constrained and port congestion added to demand for capacity (see chart). The financial crisis soon set the index back on a steadier path but not before this period of dramatic growth in demand from China had prompted a surge of orders for bulk carriers, especially the very largest ones that are used on the China trade routes.
UQ
 
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The Economist explains
Why the Baltic Dry Index is at an all-time low
Mar 10th 2015, 23:50 by S.W.

http://www.economist.com/blogs/economist-explains/2015/03/economist-explains-7

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... ...

The current malaise is much more a result of the overall supply of ships than a harbinger of doom for the world economy. In the run up to the financial crisis, as the world economy boomed and rates hit new heights, shipowners ordered a huge tonnage of bulk carriers. These hit the waves during the post-crisis slump that was already weighing heavily on demand for ships, which pushed charter rates lower still. Just as scrapping and a slimming of the order book was eroding the oversupply of ships, an uptick in Chinese coal imports in 2013 prompted another rash of orders. Ship owners reckoned that China’s appetite for coal would keep growing. But the country’s policy of weaning itself off dirty energy has contributed to a rapid decline in imports, leaving another glut of new vessels and rock-bottom rates for their owners.

UQ
 
Q
1 April 2010

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT

Oil Prices and Maritime Freight Rates: An Empirical Investigation

http://unctad.org/en/docs/dtltlb20092_en.pdf


(Page 24)
Figure 5 shows the movement of iron ore freight rates and the BDI, the Brent oil prices as well as the price of iron ore. According to the chart, freight rates and the BDI are moving in tandem suggesting a high degree of correlation. This is to be expected since the BDI is a compendium of spot voyage charter rates for a mixture of bulk carriers over different routes and could therefore serve as a proxy for iron ore freight rates. To ensure that any bias in coefficients that may result from regressing iron freight rates on its proxy is taken into account, an equation
that excludes the bdi from the set of the explanatory variables has also been estimated.

The marked drop in iron freight rates as well as in the value of the BDI both recorded in the second half of 2008 is worth noting. The BDI dropped from an historical peak of 10,800 in May 2008 to 676 in December 2008, a cumulative drop of more than 90 per cent. The chart also highlights the overall matched movements between iron ore freight rates and Brent oil prices, including the dramatic dive at the end of 2008. Driven mainly by increased and sustained demand in emerging dynamic developing countries in Asia, especially China, iron prices have increased substantially since 2004 along the same trend of Brent crude oil prices. In all evidence, the global credit crunch and the economic downturn have a role to play in the sudden slump in the dry bulk commodity trade.
UQ
 
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