Although the news out of China seems to be good at the moment one thing to look out for is rising stockplie levels of iron ore at chinese ports. This is a common way companies try and manipulate the shipping markets by having huge stockpile and storage areas and thus being able to turn on and off the shipping tap when the time suits.
So I think we are still in for a wild ride. Look for s a short term market weakening and then a spurt around Sept / October.
New Building cancellations - Another important determinant of shipping freight rates is based on supply side fundamentals ie how many ships there are available in the open market. There have been reports over the last 6 months from various economists insisting that many contracts for new ships on order are in jeorpardy. Some say upto 40 percent of all new building contracts could be cancelled. Word on the ground is that the reality is much less, maybe 15 percent maximum. I think where possible shipyards are happy to go back to the negotiation table rather than lose an enitre order book.
- The Virtual Shipbroker
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