As Of Today, The Baltic Dry Freight Index Has Never Been Lower

Tyler Durden's picture

Having fallen for 20 straight days, crushing the hopes and dreams of the mid-year bounce - and thoroughly breaking down from seasonally positive tendencies - The Baltic Dry Freight Index has collapsed to all-time (back to 1984) record lows.

At 504, this is the lowest cost for dry freight ever (which must be an unequivocal good right?)


As mid-year hype collapses into reality (and entirely smashes seasonal expectations)


Of course the clarion calls of the status quo, everything is awesome, optimists is that this has nothing to with demand but is merely due to over-supply of ships...

Supply has indeed surged...

Source: @M_McDonough

But only thanks to totally manipulated and decoupled-from-reality signals from 'markets' that caused firms to massively mal-invest in building ships for the renaissance of global trade... which never happened.

In fact, as Bloomberg notes, China is leading the global slump in demand growth for the shipping industry's biggest source of cargoes...

A surge in China’s imports of iron ore will slow to just 1 percent in 2016, about half this year’s expansion and the weakest pace in six years, according to data from Clarkson Plc, the world’s biggest shipbroker. Global trade in the raw material will increase the most slowly since 2001. China’s economy will grow by 6.5 percent in 2016, the least in a generation.


“The main issue is the lack of demand for iron ore from China,” Eirik Haavaldsen, an analyst at Pareto Securities AS in Oslo, said by phone. “This market is looking like a disaster and the rates are a reflection of that. It is looking scary for the market and it doesn’t look like there is going to be any life in the market in the near term.”

Charts: Bloomberg

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tudemonstro's picture

Can anyone use the BDI (as a leading indicator) to predict when TSHTF?  Are we looking at February, 2016?  Later?  Earlier?

I realize that the equation is partly a guess due to its dependence on crowd psychology, but do you think we are close?

FreeShitter's picture

Biggest indicator of it all, that and the commodity index at near all time lows....CTRL P some more motherfuckers.

mtndds's picture

And the idiots at the FED dont see this?  Bunch of dumbasses....

FreeShitter's picture

Oh they see it that's one of the many reasons why they cant raise rates. This shitstorm is a cat 5 on roids.

AC_Doctor's picture

Oh noes!  Dry Pagina!  Fill up those empty cargo containers with rubber dog shit from China!!!

And....cargo containers full of Jiffy Pop to eat when this fucker blows up to shitstorm 5.0 category

Amish Hacker's picture

I was thinking that with a minimal amount of work, those empty shipping containers could become housing for global homeless/refugees. Over-supply, meet urgent demand.

Long oxy-acetylene torches.

Baa baa's picture

Works in Mexico, although a few trees overhead would be nice.

. . . _ _ _ . . .'s picture

Nah, fill 'em with Syrian refugees.

Two birds, one stone.

buzzsaw99's picture

you just said that about the negative swap spread too. worst, since, well, ever actually...

aliki's picture

i mean, if this is true, i don't even know WTF to say:

Breaking911 ?@Breaking911 --- LAX: Man Dressed as Pilot Tries To Board JetBlue Flight Headed To New York; He is Missing

orangegeek's picture

Broke 509 - maybe shipping needs lines need to add value.


Something like a bladder for their shipping compartment for additional safety.


This still cracks me up!!!


Oh and btw, FUCK YOU YELLEN!!!

bmr22's picture

We have already decided to buy Zero crap for Christmas this year. Any gifts given will be something our family needs like socks or pants or a shirt and even most of that will come from the local GW. No new TV's, Icrap or gee-gaws. They seem to be just about giving TV's away this year but our 7 year old Dynex just keeps on playing.

general ambivalent's picture

Well that's a slippery slope. Your friends won't bother coming over for the superbowl if you don't upgrade your tv. Next thing you won't be watching football at all!

FreeShitter's picture

"All I got for Christmas when I was a child was a dirty old sock and maybe a few coins"

-Ozzy Osbourne.

Baa baa's picture

I always wanted to own a ship. How neat would it be???...

Jethro's picture

Fill it with Goats, Rename yourself Captain Al Steuben, book berths, and make ports of call around the Arabian peninsula. Name your ship the Love Goat. Cry all the way to the bank...

moonmac's picture

401K suits just came in to let us know they’re moving bond funds to cash and our company is now matching 100% instead of 25%. I guess I’m going all in. We really need QE4. now

Rainman's picture

Chinese shipyards down to 1600 from 3000 in the past couple years.

Ghost cities weren't the only malinvestment the Chicoms were into.

Thisisbullishright's picture

Everything IS awesome!!

The markets started a straight line ramp fest at precisely 12 o'clock!

Totally logical and for fundermental reasons!


xrxs's picture

Argh.  I have the Everything is Awesome song stuck in my head now.

Conax's picture

Mod them with booms and nets, have them go out in the Pacific and collect some of that Texas-sized floating sea of garbage.

kotfare17's picture

I was the only one to predict it in 2013 when QE3 started (commenting under another name) and you all called me dumb and stupid.


Prediction fulfilled. QE and Zirp caused collapse of world trade

Arnold's picture

Yes and its derivative products were bought and sold for hundreds of trillions of US bucks.

We still call you dumb and stupid.


Myself, I predicted that 'The Simpsons' cannot last more than thirty seasons.

Chuckster's picture

Is there any way to play this index in the markets?

OldPhart's picture

How many Syrians can one fit in a container?

Dragon HAwk's picture

We don't need no Stinking Ships..

Dragon HAwk's picture

Since garbage floats, why not compress it into interlocking bales and make a island.. hey Chine, beats dredging, get it big enough you can put an airfield on it. have your own country, get creative with the word offshore,  put new meaning into Visit the Sargasso Sea..

ali-ali-al-qomfri's picture

soon we'll have to change it's name to

Baltic Dry Dock Index

california chrome's picture

Convert freight box ships to cruise liners for Merkel's Muslim Minion.

ElixirMixer's picture

So what you are saying is to get bullish on Bengladeshi ship breaking.

coast's picture

buy your loved ones an ounce of PHYSICAL silver for Christmas...


zeroaccountability's picture
zeroaccountability (not verified) Nov 19, 2015 4:30 PM

For several years now, it's been record low this, record that, record something else....when this thing blows, it's going to be one for the RECORD BOOKS!

MaxThrust's picture

Oh they see it, that's one of the many reasons why they cant raise rates. This shitstorm is 5 cats with hemorrhoids.