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Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
 Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the world are pursuing bold stimulus measures. And the United States is looking solid enough for the Federal Reserve to contemplate its first interest rate hike in nearly a decade.
Moreover, gas prices have fallen sharply, which aids consumers, and the stock market is way up, having nearly tripled from recession lows.
But this is no time for investor complacency: indeed a key economic indicator suggests trouble may be brewing just beneath the surface.
The index in question: the Baltic Dry Index.
As a composite measure of worldwide daily shipping prices for commodities like iron ore, steel, cement and coal, the BDI provides insight into manufacturer demand for the raw materials that, literally and figuratively, form the foundation of the global economy.
Typically, a rising BDI coincides with stronger demand from producers, who’ll need raw materials to generate energy and manufacture a variety of things, from roads and bridges to cars and machinery.
This is what makes the BDI such a compelling indicator. It provides information about core economic activity that has yet to take place.
The thing is, the BDI crashed from 2013 highs and now sits around 30-year lows.
The sheer magnitude of the decline should grab every investor’s attention.
My colleague Dave Sterman recently expressed concerns of the growing likelihood of financial distress for dry bulk shippers , which has broad domestic implications, but I am equally concerned about what it means for the global economy.
While the plunge doesn’t necessarily portend a market crash, know that the BDI has shown persuasive correlations with severe market downturns before. It happened in 1999, just ahead of the 2000 dot-com bust. And in 2008, the BDI plunged a stunning 90% in less than half a year. That move occurred soon before the 2008 stock market rout was fully underway.
If the BDI was able to forecast the worst of the past two market crashes, might the current plunge also signify trouble ahead?
I think it may… but with a caveat.
As Dave Sterman recently noted, “Dry bulk shippers ordered a lot of new ships in 2013, many of which started plying the waters in the past 12 months.” In fact, the industry’s new ship orders more than tripled to 947 in 2013, from 267 the year before, because coal imports were expected to rise dramatically.
When the big increase didn’t occur, the shipping industry was left with a major oversupply problem — “too many ships chasing too little market action,” as David puts it. The oversupply has triggered aggressive, industrywide shipping price cuts. For example, the average daily capesize rate, the charge for ships that carry up to 150,000 metric tons of cargo, is now around $6,600, compared with as much as $20,000 per day a year-and-a-half ago.
A similar trend is underway in the oil industry. There, too, crashing prices have much to do with a supply glut (brought on mainly by soaring U.S. production), and the glut makes it harder to tell how much of the crash is due to falling demand. This dilutes oil’s value as a leading economic indicator.
Because of the shipping glut, something similar is probably happening with the BDI.
That said, the BDI’s plunge is likely giving a strong signal about the demand side of the equation. By now, most investors are well aware of the many drags on demand for commodities. European and Japanese economies are in turmoil, a recession is underway in Russia and Canada and Australia may also be entering into recession.
Many analysts consider China to be the single-biggest factor in weakening raw materials, simply because its economy is now so large. No country buys as much iron ore as China, yet its imports of the commodity are only expected to rise 7.5% this year, the slowest pace of growth in five years.
So despite the large supply component that’s in play, I still think the BDI has an important message about the global economy. It’s probably not signaling the dire economic conditions a 30-year low might suggest, but investors should be prepared for the possibility of the global economy slowing down and perhaps even slipping dangerously close to recession.
Risks To Consider: If I’m right in my assessment of the BDI, then investors could be greatly underestimating the risk of serious losses in stocks, bonds and other financial assets .
Action To Take –> Besides being a useful economic indicator, the BDI has implications for the overall dry bulk shipping industry. It’s a very tumultuous and tricky place to invest right now, so investors thinking of braving the space should re-visit Dave Sterman’s industry analysis. The piece provides a detailed overview and level-headed investment approach. In the meantime, investors should think carefully about the broader ramifications of current BDI readings and consider paring their exposure to riskier assets, particularly stocks.
Source: Street Authority | Hellenic Shipping News
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Monday, 09 March 15
CHINA'S IMPORTS - NEVER MORE IMPORTANT TO SHIPPING? - CLARKSONS
Over the last 15 years China has led maritime forecasters a right old dance. In 2002, rumours that Chinese iron ore imports were about to take off ...
Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
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- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
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