Tuesday, March 24, 2009

Eyes On The Baltic Dry Index Again

The Baltic Dry Index has closed down yet again.

Here is the daily chart from stockcharts.com.

Last December the Index hit the low of 663 points and recovered to a high of 2298 in early March.

Since then the index has retreated to 1773 down some 22%.

Posted last Thursday,
China Shipping Warns Bleak Outlook For Baltic Dry Index, China Shipping Development warns about falling volume and over capacity.

Also do read some of the comments posted on
The Glimmer Of Hope As Baltic Dry Index Soars.

Published March 9th 2009.
Baltic Dry Index Reaches Highest Since October on Grain Cargoes. Some comments..

  • “Grain cargoes and large volumes out of especially South America” are supporting panamax rates, Lars Erich Nilsen, an Oslo-based analyst with specialist investment bank Fearnley Fonds ASA, said in a phone interview. “On the other hand, the iron-ore market, which is the underlying driver for capesizes, is not in a particularly” good shape, he said.

    Iron-ore stocks in China, the world’s biggest steelmaker, have jumped 1.2 percent this year while domestic prices for hot- rolled steel sheet, a benchmark steel product, fell 7.7 percent.

    The steel industry globally accounts for almost half of all dry-bulk cargo, according to shipper Golden Ocean Group Ltd.

    Steel Producers

    Producers including ArcelorMittal, the world’s biggest steelmaker, have cut output in response to slumping demand and a slowing world economy.
    Global growth is likely to shrink for the first time since World War II and trade decline the most in 80 years, the World Bank said today. That may further curb demand for steel and iron ore.

    “With steelmakers looking to cut production again, iron ore purchases have been reduced and there are reports of distress sales and offers by iron-ore traders,” Jim Lennon, a London- based analyst with Macquarie Group Ltd., wrote in a report. “We would expect exports from India to contract once again in coming months.”

Is it possible to see this 'correction' turn into yet another sharp downtrend?

Do you reckon it's possible?

Hope I am not wrong but I am afraid that I do think so.

Here is an editorial: Baltic Dry Index Down 20% in 5 Days: This Clearly Signals the End of Days