"Nothing Is Moving," Baltic Dry Crashes As Insiders Warn "Commerce Has Come To A Halt"
- Thread starter 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
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
Today 310.
" the price of moving major raw materials by sea "
My guess is the BDI number would be gradually losing its importance / relevance in the foreseeable future for various obvious factors, including oil substitution by renewable energy, vessel ownership (due to low cost manufacturing by S Korea) with producers/suppliers, cross continental rail transportation (being built by China), overstock of raw materials (in China), undersea/on-ground pipeline for oil and LPG, popularity of air shipments including internet shopping, etc.
My guess is the BDI number would be gradually losing its importance / relevance in the foreseeable future for various obvious factors, including oil substitution by renewable energy, vessel ownership (due to low cost manufacturing by S Korea) with producers/suppliers, cross continental rail transportation (being built by China), overstock of raw materials (in China), undersea/on-ground pipeline for oil and LPG, popularity of air shipments including internet shopping, etc.
Well at some point in the future China will work down the current raw material oversupply situation and will need large bulk carriers (100,000 tonners). No plane can even come close to matching that. And pipelines don't do bulk.
As for low cost South Korea, they have been in the ship building biz for decades. Meanwhile the organized maritime industry has been around for centuries and there all kinds of ways to own/charter. Nothing new.
As for low cost South Korea, they have been in the ship building biz for decades. Meanwhile the organized maritime industry has been around for centuries and there all kinds of ways to own/charter. Nothing new.
True, and I agree.
However, it all depends on the world economy and the progress of building several new cross-continent rails and the two new canals by the China investment, besides pipelines.
http://www.theguardian.com/world/2015/jan/20/-sp-nicaragua-canal-land-opportunity-fear-route
http://thediplomat.com/2015/05/no-china-isnt-building-a-game-changing-canal-in-thailand-yet/
I still believe their impact on BDI in the future could be quite significant, once operational.
We will see.
New canals are to accommodate the Largest bulk carriers. But in any case all those projects are based on economic need. If the need is not there, like presently, they will stay on drawing board. Once they are needed in the future so will large bulk carriers. Just like large airfreight carriers. Economy of scale wins out when you are talking millions of tons.
