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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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Thursday, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & ...
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- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Parliament of New Zealand
- White Energy Company Limited
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Economic Council, Georgia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
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