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Baltic Dry Index
nipper
post Posted: Mar 11 2020, 10:32 AM
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In Reply To: mullokintyre's post @ Feb 27 2020, 07:43 PM

QUOTE
"We think (container) trade is down 30 to 40 per cent, particularly on imports. The logistics industry, particularly with the international trade, is a really good indicator of economic activity and this will have an impact, no doubt, on the Australian economy. That's just evident from the lack of flow-of-trade from China,"

https://www.abc.net.au/news/2020-03-10/coro...ection=business

QUOTE
.....some TWU members are reporting as much as an 80 per cent drop in containers arriving from China in some ports, with industries linked to the volume of trade feeling the impact.
"Transport operators have little choice but to cut workers' hours or ask them to use up their annual leave," the union's national secretary, Michael Kaine, said in a statement. "Workers are understandably concerned for their job security, with many casual workers left struggling to pay the bills. "Companies are operating on such tight margins that when work becomes unavailable through no fault of the operator or workforce, their ability to pay workers becomes reliant on government bail-outs."




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Feb 27 2020, 07:43 PM
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In Reply To: early birds's post @ Feb 27 2020, 06:24 PM

And to top it off, new car sales have plummeted in USA, China, and here in OZ.
us Here

AUS HERE

and in ChinaHERE
Mick



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early birds
post Posted: Feb 27 2020, 06:24 PM
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In Reply To: mullokintyre's post @ Feb 27 2020, 06:09 PM

the low fuel price might save them go to bust.
really tough time for the logistic sector. so sad for them.



 
mullokintyre
post Posted: Feb 27 2020, 06:09 PM
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The BDI has recovered a little since the last post.
However, that does not mean that the freight industry is not in deep trouble.
FromWC

QUOTE
It Gets Surprisingly Ugly: US Freight Shipments Plunge 9.4%, Steepest since 2009
But the coronavirus impact has not been felt yet; that will come later.
By Wolf Richter for WOLF STREET.
Shipment volume in the US by truck, rail, air, and barge plunged 9.4% in January 2020 compared to the already weak January a year earlier, according to the Cass Freight Index for Shipments. It was the 14th month in a row of year-over-year declines, and the steepest since October 2009, during the Financial Crisis:
he Cass Freight Index tracks shipment volume of consumer goods and industrial products and supplies by all modes of transportation – truck, rail, air, and barge – but it does not track bulk commodities, such as grains or coal.

In December, when the index had plunged 7.4% year-over-year, the steepest drop since November 2009, the calendar got blamed because Christmas fell on a Wednesday, as it does regularly. In January, the year-over-year drop of 9.4% was even worse, from an even weaker month a year earlier, and this time, there is no calendar to blame.
December was the month when Celadon Group, with about 3,000 drivers and about 2,700 tractors, shut down — the largest truckload carrier ever to file for bankruptcy in US history, which came on top of hundreds of mostly smaller trucking companies that had also shut down in 2019.

January was the month when barge operator American Commercial Lines, with 3,500 barges mostly on the Mississippi River, ran aground, so to speak. After having worked out a deal with its lenders in January, it announced at the beginning of February that it would file for a “prepackaged” bankruptcy.

January was also the month when two of the largest US railroads – CSX and Union Pacific – reported terrible results, including dropping revenues and massive layoffs on broad-based weakness in the transportation business.

Rail traffic in January offered no respite from the miserable year 2019: Carloads dropped 5.9% compared to January last year; and containers and trailers fell 5.4%, according to the Association of American Railroads, “reflecting continued softness in manufacturing and global economic weakness made worse by trade uncertainties.”

The 9.4% January plunge in the Cass Freight Index for shipments pushed it below the January 2018 level and near the January 2017 level. The stacked chart – each year is a colored line – shows the large seasonality of the freight business. January is always a low point. But this January, represented by the big red square near the left bottom of the chart, was particularly weak. The top black line represents historic boom-year 2018. The green line represents down-year 2019, which deteriorated relative to other years as the year progressed:



Freight expenditures drop below January 2018.
This data is not based on sentiment surveys but on actual freight invoices. Cass derives this data from freight invoices paid on behalf of its clients ($28 billion in freight bills in 2018), representing a large sample of the actual shipments and payments in the US by numerous companies across many sectors.

In January, the Cass index for expenditures – reflecting how much shippers, such as retailers and manufacturers, spent on transportation costs, including on fuel surcharges – dropped 8% year-over-year, after having dropped 6.2% in December. It was the sixth month in a row of year-over-year declines:


It is only based on US figures, but i can't imagine any other country will be fairing any better.

Mick




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nipper
post Posted: Feb 27 2020, 05:12 PM
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Monitoring the Big Data shipping index will provide a strong signal as to how the coronavirus disruption is being managed.

The index is arguably more reliable than the leading shipping index – the Baltic Dry Index – because the latter is only an index of container shipping costs. That means events unrelated to global demand can cause large changes in shipping prices.

As JP Morgan's Anthony Wong notes, a good example of this is how the temporary supply shock caused by Iran's seizure of a British oil tanker corresponded with a jump in the Baltic Dry Index over July-August 2019, despite trade volumes staying quite flat.

"The main benefit of our Big Data Shipping Index is that we are able to obtain data much earlier than figures from official sources, with initial data coming in with only a one-day lag, compared to at least a week for only a handful of countries that report high-frequency data," Mr Wong said.

QUOTE
The analysts are using the Big Data Shipping Index, created by JPMorgan analyst Anthony Wong, which tracks the worldwide movements of over 50,000 commercial ships, emitting 19,000 radio signals per second.

Mr Wong's data reveals a sharp slowdown in global shipping volumes in February. While global shipping volumes have fallen since the end of 2017, when the US-China trade war escalated, Chinese volumes are still 30 per cent lower than their historical average.

"In cumulative terms, inbound and outbound activity are both running around 30 per cent lower since Lunar New Year, February 7, relative to the historical average," Mr Wong said. "We will look for an upturn in the index as an early signal that the growth shock from the coronavirus has faded."




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Feb 27 2020, 05:12 PM
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Posts: 6,951
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Monitoring the Big Data shipping index will provide a strong signal as to how the coronavirus disruption is being managed.

The index is arguably more reliable than the leading shipping index – the Baltic Dry Index – because the latter is only an index of container shipping costs. That means events unrelated to global demand can cause large changes in shipping prices.

As JP Morgan's Anthony Wong notes, a good example of this is how the temporary supply shock caused by Iran's seizure of a British oil tanker corresponded with a jump in the Baltic Dry Index over July-August 2019, despite trade volumes staying quite flat.

"The main benefit of our Big Data Shipping Index is that we are able to obtain data much earlier than figures from official sources, with initial data coming in with only a one-day lag, compared to at least a week for only a handful of countries that report high-frequency data," Mr Wong said.



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 

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mullokintyre
post Posted: Jan 21 2020, 10:40 AM
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Things just keep getting worse for the BDI.
From Zero hedge
QUOTE
The Baltic Exchange's main sea freight index hit a nine-month low on Monday, dragged down by falling rates of capesize and panamax segments as world trade continues to slump.

The Baltic Dry Index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities across the world, dropped 25 points, or 3.3%, to 729 (according to Refinitiv data), the lowest level since April 2019:

The capesize index .BACI dropped 119 points, or 16.7%, to 593 - its lowest since April 23.The index registered its 27th straight session of losses, and also its largest daily percentage loss since early April.

Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes including iron ore and coal, fell $592 to $7,760.

The panamax index .BPNI lost 4 points, or 0.5%, to 866.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, declined $39 to $7,791.

The supramax index .BSIS remained unchanged at 560 points.

And it was no surprise to us Monday that the IMF slashed the global economic outlook for 2019 to 2.9% in October, the lowest since the financial crisis, and warned that global trade growth is "close to a standstill."

The Baltic Dry Index is seen as a leading indicator that provides a clear view of the global demand for commodities and raw materials.


Not sure what value the IMF forecasts may be.
Like so many of the expert economists they need to have the spelling changed to econo-misseds.
They so frequently miss their forecasts as to be almost irrelevant.

Mick



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nipper
post Posted: Jan 9 2020, 10:48 AM
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In Reply To: mullokintyre's post @ Jan 9 2020, 08:24 AM

I was looking for a press release about how BHP was putting out a tender for a complete new shipping fleet, fueled by LNG (I think) for, mainly, bulk carriers, and getting away from bunker oil and diesel. This would have an impact of accelerated obsolescence of existing fleets, I would suspect.



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jan 9 2020, 08:24 AM
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In Reply To: mullokintyre's post @ Jan 8 2020, 01:58 PM

Something else that needs to be considered is the sheer number of cape sized bulk carriers that are trying to ply their trade.
The graph in the link Here

shows the massive increase in bilk carriers from from 2010 onwards. As these ships have a lead time in years, there may well be still more being brought into the fleet, particularly in China and Korea.

The tonnage far exceeds the increase in bulk shipments (even allowing for the massive jump in Iron ore and coal).

And as more and more ships are brought in, they increase in size and the smaller ones get scrapped.


So there are many factors that need to be considered.

Mick




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mullokintyre
post Posted: Jan 8 2020, 01:58 PM
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In Reply To: joules mm1's post @ Jan 8 2020, 12:26 PM

I have no idea of what the lag time is.
Mainly because I see most of the indexes have been artificially inflated for the past few years.
Here in Oz the indexes are propped up by the poor returns on other assett classes ( cash, and until recently gold) , plus the ever increasing amounts of money flowing into super.
Just about every other country are running an effective negative interest regime.
In the US its low interest regime combined with the corruption of the Fed and the commercial banks.
So I can’t help you there.
I think another issue is that less and less of the GDP in western economies are reliant on the production of goods. More and more of the economy is driven by service industries.
So the effect of the slowing goods has less and less impact over time.
Mick




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