What's happening to the Baltic Dry Index?...

[Bigmack]

A while ago there was a lot of buzz on this forum about a constriction of shipping. The BDI has changed very little since then.

What's the scoop on the shipping of commodities and raw materials? Should we be getting ready for shortages, or has that all blown over?

[MADem]

1. Well, every bozo has an opinion, here's one!

Shipping stocks have been absolutely beaten up during 2008, but will 2009 be the year of the rebound?

Sensitive to both the global economic slowdown and the drop in energy prices, shippers may still be suffering. But keep them in mind as an early play when the economy (hopefully) recovers sometime in the New Year.

The WSJ looks at a nice run by DryShips and Eagle Bulk Shipping.

Andrea Kramer at Schaeffer's Research eyes Euroseas.

Bill Luby at the VIX and More blog says watch the Baltic Dry Index in 2009 for confirmation that shipping (and trade) are returning to more robust health.



http://www.usnews.com/blogs/the-ticker/2008/12/31/the-shipping-news.html

[Idealism]

2. Heres the last news article I saw on the topic

http://www.post1.net/lowem/entry/baltic_dry_index_falls_93_as_shipping_rates_plunge_signalling_global_economic_collapse

It has stayed steady since November, sitting slightly higher, but still signaling some REAL bad problems for us this next year.

[Joanne98]

3. ALL the bulk shippers have been going up.

http://finance.yahoo.com/q?s=DRYS
http://finance.yahoo.com/q?s=DSX
http://finance.yahoo.com/q?s=FREE
http://finance.yahoo.com/q?s=EXM
http://finance.yahoo.com/q?s=SBLK
http://finance.yahoo.com/q?s=OCNF
http://finance.yahoo.com/q?s=EGLE

[applegrove]

4. My dad follows that. Don't know where the index is right now.

[TomClash]

5. It bottomed out at about 660

and now has risen a bit lately.

There's not much demand right now for cement, iron ore, etc. I don't think shortages are the issue.

[HamdenRice]

6. Because of the credit crisis, banks are not issuing letters of credit

Without letters of credit, it's almost impossible to finance international trade in commodities.

Hence trade is dead.

[CoffeeCat]

7. Is the decrease in international trade...

...also due to increased demand from those who would use or ultimately consumer these materials?

It seems like the credit crisis is one problem. However, even if credit was available--are businesses and consumers willing
to take additional credit right now?

[Joanne98]

8. I know. We gave them all that money for nothing. What did they do with it anyway?

Fucking crack addicts!

[T_i_B]

10. Yep

No credit to buy stock and less people buying goods. Not a good combination.

Add to that overcapacity built up by many shipping lines and you have a bad situation for shipping.

Not to mention currency problems as well. Over here the Pound has fallen sharply and that has affected imports badly. If the dollar starts tanking (and I would not be suprised if it did) then watch out.

[anigbrowl]

9. Data is here

http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

basically it went way up due to the high cost of oil, then way down as the price of oil sank and so did demand for shipping. At this stage the contraction in demand has been priced in and so its been stable for the last month or two. Scroll all the way down, there are many comparison graphs (with commodities, stock indices and so on) which are a useful guide to the various factors at work.