We've mentioned a coupletimes the sharp slowdown in global shipping, but sometimes a visual works better. Barry Ritholtz posts a chart of the Baltic Dry Index, a measure of dry goods shipping rates. It sorta tells you everything you need to know.
Right now shipping rates are practically breaking even the costs, having gone to a lofty 5x to 8x daily dry cargo vessel costs.
The picture tells the story of
1) Global vessel capacity/ fleet not being able to meet demand (from China etc) in shipping iron ore, coal etc. from 2003 to 2007.
2) The recent sharp fall relates in part to the reverse situation (lots of newbuildings expected to hit the water) on top of a perceived slowing down in the global demand of materials.
3) It finally tells the story of lower l.c. issuance having provided an extra spare capacity in a highly competitive and efficient sector.
Shouldn't this collapse lower grain basis? Or soy meal basis? Both are extremley high. Whether your bying or selling your paying the freight both ways.
The picture tells the story of
1) Global vessel capacity/ fleet not being able to meet demand (from China etc) in shipping iron ore, coal etc. from 2003 to 2007.
2) The recent sharp fall relates in part to the reverse situation (lots of newbuildings expected to hit the water) on top of a perceived slowing down in the global demand of materials.
3) It finally tells the story of lower l.c. issuance having provided an extra spare capacity in a highly competitive and efficient sector.