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World Shipping Slump Deepens As China Retreats

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The implication is that trade is no longer the pulse of the global economy. Other indicators are less worrying.

Both credit and key measures of the money supply are rising briskly in Europe, the US, and latterly in China as well, pointing to a recovery later this year. These forces may prove to be more powerful in the end.

Yes clearly even more credit is less worrying!!!!!

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Dryships (my proxy for the Balti Dry Index) is at 37 cents a share. The peak was $120 a share in 2007. Now don't go buying any of these because I don't know if it can go to zero. But if you put $1000 in to the stock that's roughly 2700 shares. Hold that for 10 years, maybe they get back to $120 each. 2700 x 120 = $324,000!

This is the baltic dry index (live chart):

bdi.gif

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Doesn't this something to do with one of the largest ports in China being blown up in the last week... That has to be a lot of goods and infrastructure to replace in a fairly short period of time, and must have quite an impact on their exports.

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Doesn't this something to do with one of the largest ports in China being blown up in the last week... That has to be a lot of goods and infrastructure to replace in a fairly short period of time, and must have quite an impact on their exports.

If the port capacity decreases you would expect the index that tracks shipping costs to spike.

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http://gcaptain.com/asia-europe-container-freight-rates-have-fallen-off-a-cliff/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+Gcaptain+%28gCaptain.com%29#.Vdn-upcWkVh

COPENHAGEN, Aug 21 (Reuters) – Shipping freight rates for transporting containers from ports in Asia to Northern Europe fell by 26.7 percent to $469 per 20-foot container (TEU) in the week ended on Friday, one source with access to data from the Shanghai Containerized Freight Index told Reuters.

It was the third consecutive week of falling freight rates on the world’s busiest route and rates are now nearly 60 percent lower than three weeks ago.

Freight rates on the world’s busiest shipping route have tanked this year due to overcapacity in available vessels and sluggish demand in goods to be transported. Rates generally deemed profitable for shipping companies on the route are at about $800-$1,000 per TEU.

Nearly a collapse...

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The carriers a few times a year all put in a general rate increase.So if a TEU container is $800 Ningbo to Felixstowe they all put up the rates to say $1500.Then they all break ranks to fill ships and the price falls again.The 60% fall is actually from the last general rate increase.Its actually still higher than it was a few months ago.

However the next 6 weeks are the prime time for shipping in xmas stock.If rates cant hold now its not looking good for the shippers.Im ordering two containers tomorrow from two factories to ship last week of October.Im banking rates will be on the floor then.A lot of the falls are due to lots of capacity being added to the route,plus oil prices mean break even is much lower.

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