Baltic Dry Index

[cottonpicken]

This is scaring the hell out of me.

http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

[checking]

Why?

Do you own a Panamax sitting in drydock?

Just goes to show that production of too many bales of say cotton means that everyone can afford earplugs!!

[tmyrfield]

canary in coalmine.
record low bdi preceeded last market meltdown in 2008.

http://www.zerohedge.com/news/shipping-rates-go-negative

you are right to be scared....
cya

[checking]

Too many ships chasing too little tonnage at any crusing speed. What would you expect to happen. It has lost any indicator status, if it ever had any.

Another wive's tale, just like oats know.

[LEP]

I agree with checking. Since supply is much larger than demand it doesn't tell us
much anymore.

I know this is the rate for a panamax vessel but this has to work its way back to
great lakes shipping.

Kinda looks like the crazy 8 were hoodwinked on the laker purchase and farmers
get left holding the bag.

Thats why they say "invest in what you know".

[bucket]

Glencore International Plc paid nothing to hire a dry-bulk ship with the vessel’s operator paying $2,000 a day of the trader’s fuel costs after freight rates plunged to all-time lows.

Glencore chartered the vessel, operated by Global Maritime Investments Ltd., a Cyprus-based company with offices in London, Steve Rodley, GMI’s U.K. managing director, said by phone today. The daily payments last the first 60 days of the charter, Rodley said. The vessel will haul a cargo of grains to Europe, putting the carrier in a better position for its next shipment, he said.

“Our other option was to stay in the Pacific and earn poor revenues or ballast to the Atlantic and pay the fuel ourselves,” Rodley said. Ballasting refers to sailing without a cargo. Charles Watenphul, a spokesman for Glencore, declined to comment in an e-mailed response to questions.

The Baltic Dry Index, a measure of commodity shipping costs, advanced 1 point to 648 points today, rising from the lowest since August 1986 on Feb. 3. Owners and operators of vessels are paying as much as $50,000 a day in fuel to travel to ports to win work, or agreeing rates at zero cost as rates fall to records.

Australian Grain
Charters for the so-called backhaul routes that reposition ships to the Atlantic Ocean region from the Pacific are falling to the lowest since indexes started, exchange data show. Rents for Capesize ships that haul ore and grain on backhaul routes were at minus $7,342 a day, the lowest since that index began in 1999, exchange data show.

GMI will pay Glencore as the Panamax-sized vessel travels from near the coast of Yosu, South Korea to Australia to load grain, reverting to a daily rate linked to a Baltic Exchange index level once the 60 days expired.

Details about the ship hire were included in a list of vessels charters published daily by the Baltic Exchange, the London-based assessor of freight costs. This is the first time the exchange has published vessel charters with rates at less than zero, said Derek Prentis, 86, the exchange’s longest- serving member.

Quarter Century
D/S Norden A/S, Europe’s biggest publicly trading commodity shipping company, said Feb. 3 it hired a Supramax vessel at no cost other than fuel charges, its first such transaction in a quarter century.

Supramax vessels carry about 25 percent less than Panamax ships. Hire costs for the dry bulk fleet of more than 8,900 vessels are falling as new vessels entering service outpace demand to carry commodities in bulk. The fleet is forecast to swell by 12 percent while demand growth rises three percent to 3.7 billion metric tons in 2012, according to Clarkson Plc, the world’s largest shipbroker.

[bucket]

It makes our grain very competetive.

[bucket]

Maybe there isn't as much grain to move as the experts thought. Take 4 million tonnes off argentina's exports, it doesn't take long to have too much shipping capacity coupled with more ships.

But fertilizer should drop as well with these rates.

[rockpile]

The same thing happened in the early 80's. It will
correct, given time.

[cottonpicken]

Lol,i guess i won't bother with chinas pmi numbers.

I'm willing to bet anything,if there was some magical
way,that most of you brought the chart up,looked at
the numbers and never even bothered stretching the
timeline out 5 years.

2000 to 648-maybe not as worrisome,to some,not
me though.

Stretch that fkr out to 5/19/08.

11709 down to 648.

Now i know most,save a select few,are good at math
and like intelligent discussion.

This is actually market forum worthy,unless the select
few want the only threads to be about *** pipelines.

[$short]

You are correct cp. The BDI is a strong indicator
of global economic health......those rates are
scary!

[mbratrud]

I would caution the fear a bit, although definitely worthy of concern. This is in part the result of a massive build up in shipping capacity much of which has come online in the past 2 years. And the high freight numbers in 08 and even a bit prior were amplified by the 2008 Beijing Olympics.

That coupled with weakening demand for Freight largely in Iron Ore as well as Grain exports in part due to stronger North American demand do to energy policies.

It will be interesting to see what happens in the next short while and if we get a bit of bounce. I think what is noticeably different from 2008 is the recession was on before we got to these levels, as well we have some bearish fundamentals directly related to over capacity.

Good post though Cotton definitely worth heightened attention over the next while to see if we break lower yet. You should be happy though this should be friendly gold and as pointed out makes our exports more competitive.

[sumdumguy]

Time to hop on the short train.

[mbratrud]

My Bad the 2008 Lows were at the begining of recesion but had bounced back 3 months later, to pre 06 levels.

[cottonpicken]

Lots of data out there is skewed or misleading or an
outright lie.

The bdi is more accurate than many indicators.

Yes an overcapacity is there,but global trade health is
not going up or static its going down.