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

Zero Hedge ^ | 12-16-2015 | Tyler Durden

[blam]

Tyler Durden
12/16/2015

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...

(snip)

[SubMareener]

We definitely so screwed!

[blam]

Doctor Copper

DEFINITION of 'Doctor Copper'

"Market lingo for the base metal that is reputed to have a Ph.D. in economics because of its ability to predict turning points in the global economy. Because of copper's widespread applications in most sectors of the economy - from homes and factories, to electronics and power generation and transmission - demand for copper is often viewed as a reliable leading indicator of economic health. This demand is reflected in the market price of copper. Generally, rising copper prices suggest strong copper demand and hence a growing global economy, while declining copper prices may indicate sluggish demand and an imminent economic slowdown."

[dp0622]

why would ANYONE listen to Kramer?

especially with the internet and learning tools available to make your own decisions.

Went long one of FOREXs the other day. After it was up 50 pips I read an article about how it was going to crash today.

They HAVE to write something every single day. It’s gibberish.

[EBH]

And we’re scheduled to raise interest rates in 30 minutes? It is all so laughable!

[Patton@Bastogne]

.

Sounds like China really needs a war at this point ... a "splendid little war" of their own ...


China, which makes about half the worlds 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 Chinas 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 doesnt 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.

.

[BeauBo]

A drop in Chinese demand would be another big factor driving down global oil prices in 2016.

[FerociousRabbit]

I have always believed Baltic Freight is a fairly good long-term bellwether when it hits extremes. Bad things coming.

[SubMareener]

Yes, it also shows that there never was a “recovery”.

[FerociousRabbit]

Yes, it also shows that there never was a “recovery”.
_________________________________________________________

But the government says all is well!

[blam]

"Yes, it also shows that there never was a “recovery”."

Yup. Copper does not show a recovery either.

[Zhang Fei]

Generally, rising copper prices suggest strong copper demand and hence a growing global economy, while declining copper prices may indicate sluggish demand and an imminent economic slowdown.

While this is generally true, the furious stockpiling, in the recent past, by Chinese speculators and end users may account for a good chunk of the demand bust. The first hiccup in prices could be dismissed as a hiccup in an overall uptrend. The extended price crash we've seen is probably sufficient for the hoarders and speculators to conclude that the trend has reversed, and the new direction for prices is down. Without speculative demand to keep quantities shipped up, it's no surprise that the Baltic Dry Index has crashed. It's not clear as yet that the Chinese economy is in recession (i.e. contracting), although it's possible that growth has slowed down.

[Leaning Right]

I like Zero Hedge, and visit it frequently.

But it seems like every month - like since forever - they’ve had an article about the Baltic Dry collapsing, or faltering, or in decline, or the like.

[fella]

"China, which makes about half the world's steel"

I'm old enough to remember when it was the United States that made most of the world's steel. Taxes and regulations have destroyed most of that.

[bert]

I have a good friend with a masters in Chem E who is absolutely clueless when it comes to his money and the management of investments.

He pays a lot of money to others for making decisions he can’t make. He is always trying to check up on the guys to whom he has intrusted his assets

[blueyon]

Question.......with The Baltic Dry being so bad why are the metals tanking also?

[blam]

Demand for manufactured goods is so low that less metals are used/needed and when less goods are manufactured there's nothing to ship.

Everything is slowing down/decreasing.

[blueyon]

thank you for the understandable answer!!!!!!!!

[blam]

"thank you for the understandable answer!!!!!!!!"

You're welcome.

The price of copper is called Doctor Copper because of it's ability to predict future economic activity. Notice the direction the price has been going the last five years. Explains why I know politicians are lying about a recovery. When the economy is robust, copper prices are high.