We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 23 February 15
Q2' CFR SOUTH CHINA COAL SWAP FOR Q2 ROSE 3.39% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.90 (+3.39%) per MT month over month and declined US$ 0.08 ...
Monday, 23 February 15
Q2' API 5 FOB NEWCASTLE COAL SWAP CLOSED $1 HIGHER THAN Q3
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.12 per MT (+6.44%) month over month and fall US$ 0.43 (-0.83%) w ...
Sunday, 22 February 15
THE BALTIC DRY INDEX LOST ALMOST 3.2% OR 17 POINTS WEEK ON WEEK
COALspot.com: The Baltic Dry Index, one of the economic indicators that monitors the health of the world's economy by tracking the price of shi ...
Friday, 20 February 15
GOVT SET TO INCREASE COAL OUTPUT TARGET THIS YEAR - JAKARTA POST
The Energy and Mineral Resources Ministry is planning to increase its coal output target this year as the government seeks to offset the ongoing de ...
Friday, 20 February 15
U.S. PRODUCED AROUND 19.2 MILLION SHORT TONS OF COAL WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.2 million short tons (mmst) of coal ...
|
|
|
Showing 3181 to 3185 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
|
| |
| |
|
