For the 56th day of the last 58, The Baltic Dry Index dropped. At 509, this is now down over 65% from the dead cat bounce highs in November 2014 and - yet again - a new all-time record low for the cost of shipping freight. It is no surprise then that, as Lloydlist reports [6], bulker newbuilding orders slumped in January. When the Baltic Dry tumbled in 2012, the glut of ships then caused a 49% plunge in orders for shipbuilding [7] - as JPMorgan said at the time, "you just have too many yards and too few orders," and given the artificial signals provided by credit-inflated commodities since, we can only imagine the overhang now.
[8]
What happened in 2012 when the BDIY dropped... [7]
China has too many ships.
The glut has pushed new vessel prices to eight-year lows and caused a 49 percent plunge in first-half orders at the nation’s more than 1,500 shipbuilders. It’s also tipped smaller yards into bankruptcy and hit earnings at larger players.
“It is a pretty depressing environment,” said Ajay Mirchandani, a Singapore-based JPMorgan Chase & Co. analyst. “You just have too many yards and too few orders, which is hurting pricing and profitability.”
Orders have tumbled as a global excess of commodity, oil and container ships has damped cargo rates and deterred owners from ordering more vessels.
And today is far worse [6] - the building has been driven by the artificial boom in commodity prices influenced by the exuberant money printing largesses of the world's central banks...
A SLUMP in bulker newbuildings was recorded during January, with analysts linking the decline to the current dismal state of the dry bulk market.
Greece-based Intermodal Research and Valuations, which prepares a monthly report on global shipping, reported just 20 new orders for bulk carriers.
It is just starting...
