It’s Probably Nothing – small dead animals

Baltic Dry: As Sea News reports, Korean shipping companies are failing to place orders for large vessels and anxiety over the future is forcing some local companies to dispose of their assets despite the relatively low shipbuilding costs as of late. (h/t Adrian)

7 Replies to “It’s Probably Nothing”

While an indicator I do not put much stock in Baltic Dry Index. To many variables involved. It is not a reliable indication of the volume of tonnage moved. More an indicator of short term demand. It also does not measure container shipping just bulk.

File this under “It’s probably nothing” too:
China Property Collapse Has Begun

The link above didn’t work – try this:
http://www.forbes.com/sites/gordonchang/2014/04/13/china-property-collapse-has-begun/

The Baltic Dry is an excellent proxy for the raw material INPUTS (iron ore; steel; copper; nickel; coal for power generation; etc. etc.) to Chinese / Japanese / Asian manufacturing of all that crap we buy at Walmart, plus Japanese cars, all sorts of electronics, etc. etc. Raw materials are the FIRST to decline, as today’s modern inventory systems notice stuff backing up in / moving slower out of warehouses. Anybody who thinks the Baltic Dry is a lousy indicator simply needs to overlay a chart of it on the major stock indices to see that it has consistently been a scary-accurate leading indicator of the economic DIRECTION lurking just over the horizon.

This is also probably nothing…
http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dataType=Harpex&floatLeft=None&floatRight=None

Davers6;
How can you conclude that? When you do the overlay the BDI shows that it has roughly flatlined since March/2011 while the TSX and DOW and S&P have rose substantially. My issue is that it measures demand and not volume. It does not measure containers.
It does not account for the increase of shipping inventory that comes into the market either. Koreans might not be building ships but that doesn’t mean others are not.