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Investors shun Greek debt as shipping crisis deepens
Posted: 29 Oct 2008, 09:12
by mikepepler
The Baltic Dry Index measuring rates for coal, iron ore, and grains, and other dry goods plummeted below 1000 yesterday, down 92pc since peaking in June.
The daily rental rates for Capesize big ships have dropped $234,000 to $7,340 in weeks, leaving operators stuck with heavy losses on long leases. Empty ships are now crowding Singapore and other global ports.
"It is extremely serious, " said Jeremy Penn, president of the Baltic Exchange. "Freight rates have never fallen this steeply before. It is telling us that world trade in raw materials has slowed dramatically. Shippers are having genuine difficulty obtaining letters of credit from banks," he said.
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Posted: 29 Oct 2008, 18:18
by grinu
If you look at it on a graph, it is one of the scariest things I have seen in a good while.....
http://www.safehaven.com/article-11696.htm
In June of this year - it was 11,500 - it is now less than 1000!! Most of that drop took place between September and mid October - and it's getting steeper.
Hasn't yet affected offical figures - pop goes the weasel.
I suggest making the most of the sales, while there are still things to buy....
Times don't get much more "interesting" than this.
Posted: 29 Oct 2008, 19:29
by mikepepler
So does this mean shortages of raw materials? Or is production cutting back at the same rate?
And there we were thinking the ships would stop for lack of fuel, and it turns out to be lack of proof of creditworthiness....
Posted: 29 Oct 2008, 22:11
by Billhook
If shippers can't access credit, it is perhaps likely that the industries using their cargoes
will be similarly hamstrung.
In which case the shortages will not be of raw materials so much as of essential finished goods,
such as nails, cloth, leather, imported fodder, fertilizer and food.
But this leads into tendentious reasoning over whether a shortage exists
when people are unable to pay the sufficient price for an item.
Regards,
Billhook
Re: Investors shun Greek debt as shipping crisis deepens
Posted: 30 Oct 2008, 17:16
by emordnilap
mikepepler wrote:The Baltic Dry Index measuring rates for coal, iron ore, and grains, and other dry goods plummeted below 1000 yesterday, down 92pc since peaking in June.
The daily rental rates for Capesize big ships have dropped $234,000 to $7,340 in weeks, leaving operators stuck with heavy losses on long leases. Empty ships are now crowding Singapore and other global ports.
"It is extremely serious, " said Jeremy Penn, president of the Baltic Exchange. "Freight rates have never fallen this steeply before. It is telling us that world trade in raw materials has slowed dramatically. Shippers are having genuine difficulty obtaining letters of credit from banks," he said.
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Looks like the market has capesized, then.
Alright, alright, it was obvious, I know.
Re: Investors shun Greek debt as shipping crisis deepens
Posted: 30 Oct 2008, 17:46
by skeptik
emordnilap wrote:
Looks like the market has capesized, then.
Alright, alright, it was obvious, I know.
Point of info. "Capesize" are so called because they're too big to fit through the Suez and Panama canals. they have to take routes which round Cape Horn or the Cape of Good Hope. They're the largest size of bulk cargo carriers and these days mostly carry iron ore on the Brazil and Australia to China routes. This says that demand from Chinese steelmakers is falling - about as basic an indicator that there is that the global economy is slowing down.
... My dad used to work as a dry cargo shipbroker on the Baltic Exchange for
H.Clarkson & Son... hmm. not looking too good.
Re: Investors shun Greek debt as shipping crisis deepens
Posted: 30 Oct 2008, 17:48
by emordnilap
skeptik wrote:emordnilap wrote:
Looks like the market has capesized, then.
Alright, alright, it was obvious, I know.
Point of info. "Capesize" are so called because they're too big to fit through the Suez and Panama canals. they have to take routes which round Cape Horn or the Cape of Good Hope. They're the largest size of bulk cargo carriers and these days mostly carry iron ore on the Brazil and Australia to China routes. This says that demand from Chinese steelmakers is falling - about as basic an indicator that there is that the global economy is slowing down.
... My dad used to work as a dry cargo shipbroker on the Baltic Exchange for H.Clarkson & Son...
Gosh I bet you're a hoot at parties.
Posted: 30 Oct 2008, 17:49
by grinu
Holy ship! We're sailing downhill from here. Throw out the lifeboats cap'n.
Re: Investors shun Greek debt as shipping crisis deepens
Posted: 30 Oct 2008, 17:59
by skeptik
emordnilap wrote:
Gosh I bet you're a hoot at parties.
Have big bag of party poppers, can and do travel. Thought I don't usually bother to bring them to discussions about dry cargo...
Re: Investors shun Greek debt as shipping crisis deepens
Posted: 31 Oct 2008, 10:49
by RenewableCandy
skeptik wrote:emordnilap wrote:
Gosh I bet you're a hoot at parties.
Have big bag of party poppers, can and do travel. Thought I don't usually bother to bring them to discussions about dry cargo...
The chap who wrote Black Swan says we should all
go to more parties...I'm off to a Hallowe'en one tonight. We may (or may not) talk about international shipping!