Baltic Dry Crashes To New Record Low As China "Demand Is Collapsing"

Tyler Durden's picture

Despite a brief dead-cat-bounce late November, which Jim Cramer heralded as evidence of stabilization in China, the world's best known freight index has collapsed to new all-time record lows this morning. Amid a persistent glut of ships and ongoing concerns about Chinese steel imports, The Baltic Dry has tumbled to 471 - the lowest level in at least 30 years.

Worst. Ever.

 

As Bloomberg adds, China, which makes about half the world’s steel, is on track for the biggest drop in output for more than two decades, according to data compiled by Bloomberg Intelligence...

Owners are reeling as China’s combined seaborne imports of iron ore and coal -- commodities that helped fuel a manufacturing boom -- record the first annual declines in at least a decade. While demand next year may be a little better, slower-than-anticipated growth in 2015 has led to almost perpetual disappointment for rates, after analysts’ predictions at the end of 2014 for a rebound proved wrong.

 

“It doesn’t help that Chinese steel production is about to see the most dramatic decline to the lowest in 20 years,” said Herman Hildan, a shipping-equity analyst at Clarksons Platou Securities in Oslo. “Demand growth is collapsing.”

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Sounds like a perfect time to hike rates and exaggerate the deflationary tsunami and monetary outflows from the world's potentially growing economies.

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ShrNfr's picture

Baltic Dry is a steel at these levels.

hedgeless_horseman's picture

 

 

When can Main Street hope to see this reflected in the price of plastic pumpkins from China?

ShrNfr's picture

That is done through the Shanhai rate, not the Baltic Dry. [Seriously, look it up.]

tarsubil's picture

Never! However, there will be increased demand for cocaine and prostitutes in New York.

G.O.O.D's picture

Peak Plastic Crap. Moar Woar is the only answer.

 

Quick Vlad, first strike.

kralizec's picture

War, huh, what's it good for?

JonNadler's picture

Plenty of money to be made

supplying the Army with the tool of the trade

 

 

Poundsand's picture

Those shipping rates look like they hit an iceberg.  Is Captain Yellen going down with the ship?  Or are we going to keep the dance band playing just a while longer?

mtndds's picture

Doesnt matter.  The FEDERAL RESERVE will raise rates and the DOW will +400 points by the end of the day.  This will become the greatest bull market in the history of mankind.  The FEDERAL RESERVE will make sure of it.

Soph's picture

Gartman must have gone long BDIY

OregonGrown's picture

With a billion newly created middle class chinese who can consume all the shit they make, who needs to ship shit across oceans anymore?

America doesnt make anything except dollars and that can be digitized..... lol

nosam's picture

I doubt this is the case as they are talking of China's iron ore and coal imports here. There are only so many ghost towns you can build before the interest, tax and maintenance costs become overwhelming.

tarabel's picture

 

 

A billion of them? Not true.

And do you know how they define middle class these days ? It's someone who holds two times the average annual income of their country in assets of any kind.

One "middle class" Chinese guy does not equate to one "middle class" American.

LawsofPhysics's picture

So what? Paper promises and financial "products" do not require such barbaric relics (like ships) to be sent all over the world.

Global Weimar motherfuckers!


KnuckleDragger-X's picture

Quite a "Brave New World" ain't it.....

wmbz's picture

Count on it!

NIRP - ON!

So when do we get our "free" money!

BeerMe's picture

Fucking lunatics or criminals.  I lean towards criminals.

Caveman93's picture

Cannot demand anything when no dollars to buy stuff I don't need to impress people I could care less about. Just sayin.

G.O.O.D's picture

What are you saying? You don't have the largest plastic christmas scene on your block?

Why, that is plain Unmerkin!

 

 

SpanishGoop's picture

What isn't going negative these days......hope.

Sign HOP.

 

NoWayJose's picture

America has plastic Chinese junk in their homes, garages, basements, and landfills... How much more does one need?

Their only hope is some new 'killer app' that renders current electronic devices obsolete!

Mr. Cynic's picture

MOAR mini-storage units!! MOAR MOAR!!

herkomilchen's picture

Wow.  That's a recessionary signal right there.  As go the container ships so go the factories.

SoDamnMad's picture

Considering China has been shipping cut-rate, subsidized steel in US and European markets for over a year. Had to go by ship but now those markets are dead. Thank you China for all your layoffs here.

Mr. Schmilkies's picture

Maybe they should convert their dry ships to wet ships and start selling oil storage. 

Mr. Cynic's picture

Interesting shipping statistics.  Bulk (BDI) ship tonnage has acutally declined over the last few years after a peak in 2011 and 2012 and scrapping rates are very high with the average age of a ship at just 9 years.

 

So those who claim these historic lows are due to increased supply of available ships are only partially correct.  The ships are available because people ain't shipping as much.

 

http://unctad.org/en/PublicationsLibrary/rmt2015_en.pdf

THE DORK OF CORK's picture

Bunker fuel now close to moving into the last 60s generation western electricity plants....

Problem is - only a few remaining.

orangegeek's picture

Jerry, it's Frank Costanza! Mr. Steinbrenner's here, George is dead, call me back!

Bemused Observer's picture

China demand is collapsing? Well, perhaps, but it seems to me that the demand is tanking here too. And since a lot of what China is exporting is stuff needed to make other things, maybe it is lack of demand HERE that is crashing China's exports...

franzpick's picture

Demand for the  U.S. largest export component - empty cargo containers - has collapsed.

PTR's picture

Jim Cramer oldie and goodie:

 

Jim Cramer - Wake up, Bernacke!

invest3's picture

Everything's awesome.  Time to hike rates.

tarabel's picture

 

 

Long U-Boats.

SweetDoug's picture

'
'
'
'
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But didn't they build a whack o' boats?

What is the amount of cargo being shipped?

If there are 10 guys and 9 ships, the shippers set the price.

If there are 10 ships and 9 guys…

•?•
V-V

chilller's picture

Think of the money to be made if you filled those empty ships with clean air and sent them to China! A guy could charge $100 a head for Chinese to step inside for a breath of fresh air!

Elio's picture

I want to see my helicpter money everything will be alright. Dont worry be happy.