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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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Wednesday, 25 February 15
PORT OF NEWCASTLE SHIPPED 13.16MT OF COAL IN JANUARY; DECLINED 16.70% FROM A MONTH AGO
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.15 billio ...
Wednesday, 25 February 15
BDI SLIPPING ONCE MORE TO FRESH HISTORICAL LOWS
COALspot.com: With the BDI slipping once more to fresh historical lows and the Chinese holidays underway, signs for a positive reversal in the Dry ...
Tuesday, 24 February 15
FOB INDONESIA COAL SWAP SET TO RALLY
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap increased US$ 3.30 (+7.30%) ...
Tuesday, 24 February 15
Q3' FOB RICHARDS BAY COAL SWAP CLOSED $59.80 W/E 20 FEB
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and decline week on week.
The Q2 swap has soar ...
Tuesday, 24 February 15
IHS ENERGY COAL CONFERENCE OF THE AMERICAS
Attend the IHS Energy Coal Conference of the Americas 17-19 March in Cartagena, Colombia and learn about timely concerns in today's coal indust ...
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- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- White Energy Company Limited
- Parliament of New Zealand
- The University of Queensland
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
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