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Baltic Dry Index


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FF: Trouble is that people wont research anything, catching a falling knife sometimes works, but you have to assess the fundamentals corrrectly to ride out the negativity if you dont fancy the knife routine!
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For those that care: Reasons for Weakness in the Baltic Dry Index (gathered from different scources)


1: There definitely is a slight drop in demand for Iron Ore in China, likely to be only temporary, maybe RSPT related.


2. There is a dramatic INCREASE of the biggest bulk dry tankers being completed in boat building yards worldwide. eg:

This year there will be an INCREASE of over 1000 new ships against an increase in actual demand of only 635 ships.


3. The thought that China may be increasing her exports at the expense of imports is muddied by a big SHORTAGE of shipping containers right now.

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There is an interesting in the AFR today in relation to the BDI.


Baltic Dry slump worst in five years

The Baltic Dry Index, a measure of commodity shipping costs, extended its longest slump in five years as reduced port congestion swelled the number of vessels for hire.



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How things get a touch garbled!


I said that ore demand drop was MAYBE RSPT related--the actual facts are the Chinese Custom stats for last month show just that demand did drop--why they apparantly didnt say.


Get youreself a list of of the largest world shipbrokers--see what they report---you will find the 16% increase in tonnage supply this year is accurate, and therefore a PRIMARY cause of the lower shipping rates that form the basis of the Baltic Dry Index.


Get yourself a list of the biggest Eastern area shipping export lines---see what they report--and you will find they all quote shortage of containers as the reason for a RISE in that shipping Index.


People assess China all wrong as they simply do not do ALL their homework, then blame China for everything that is wrong with the rest of the world---instead of thanking their lucky stars that China is as big and powerfull as it is.


BTW: watch for a Baltic Dry Index bottoming and be one jump ahead!




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