The BDI is down another 15 points to finish at 1758.
Want to know the direction of the BDI - the following article from Bloomberg
quote
Baltic Dry Index seen stagnating in next quarter
Wednesday, 25 March 2009
The Baltic Dry Index, a measure of world trade, will stagnate in the next three months after what is likely to be a record quarter as annual talks over iron-ore prices stall demand, a survey showed. The index will average 1,786 points in the second quarter, compared with 1,782 last Friday, according to the median estimate of 10 analysts, fund managers and shippers surveyed by Bloomberg. The gauge of demand for shipping commodities more than doubled this quarter as China bought more iron ore.The ore, used to make steel, is the single biggest cargo for dry-bulk ships and annual benchmark prices are negotiated for the start of the Japanese fiscal year on April 1. Prices were actually set as late as May in 2002, 2003 and 2006, and last year as late as June, according to Macquarie Group Ltd.'Iron-ore price negotiations should slow down shipping activity,' said Philippe van den Abeele, London-based managing director at shipping hedge fund Castalia Fund Management (UK) Ltd. The global economic slump is sapping demand and new ships are still being delivered this year, increasing competition for fewer cargoes, he said.The Baltic Dry Index fell a record 92 per cent last year. Global steel production shrank 22 per cent last month, with a 54 per cent decline in the US and 44 per cent retreat in Japan, according to the World Steel Association. Eurofer, the European steel industry lobby group, said that demand dropped 30 per cent this quarter and would likely fall further in the next three months.The estimates in the March 16-19 survey ranged from 1,135 to 2,950 points. They came from Castalia, Lorentzen & Stemoco AS, Drewry Shipping Consultants, Fearnley Fonds ASA, Thurlestone Shipping Ltd, M2M Management Ltd, Freight Investor Services Ltd, Galbraith's Ltd, HSBC plc and Island View Shipping.
Source: Bloomberg
Hi VS
ReplyDeleteCan you direct us to some sources on the internet you find most valid to read? I'm mostly green to shipbrokerage but I'm willing to do my homework. I've spotted BBC program called "The Box" and it opened my eyes to the importance of shipping plus the crises. I've read and reread your blog like 4 times already, week ago I started to read Ship Chartering blog.
I understand there is no easy path to become the shipbroker but with your help the road starts to be less bumpy.
Sorry for long/meaningless post/rant:
ReplyDelete----------------------------------------
Similarly, I am more than happy to immerse myself in the shipbroking business, but with a caveat. First I must have my foot in the door before I get too caught up by the idea of a shipbroking career...
Prior to the financial crisis, like many university students, my focus was to join the ranks of the bonus-laden investment bankers in London. I think "focus" may be an understatement - it became more of an obsession!
Soon after graduation, I prepared for, and passed, the first of three "CFA" examinations (Chartered Financial Analyst). It is highly regarded in certain divisions of investment banking, in the same way that the ICS (Institute of Chartered Shipbrokers) is in shipping circles.
I had hoped that it would boost my chances of starting a career in banking, but the financial crisis has played its part in demolishing those plans.
Consequently I have essentially had to write off the time and money I spent on the CFA examination, and reconsider my career plans completely.
IMO, the shipping industry seems very close-knit, rather closed off from the world/something of a mystery to most people like myself. I *guess* that it's important to have connections in the industry in the first place.
I am from the UK, and have come across a handful -not many- of shipbroker sites (e.g. Galbraiths) where they welcome applications. What are the chances that I send my CV, which happens to impress the right person, to said shipbroker at a time they are seeking to take on a trainee? Very small!
The upshot of all of this is; I must be realistic, the chances are not particularly good that I will be able to enter the shipbroking world, and I would be a fool to become overly focused on it as I did with Investment Banking.
Hi Anon - Just to re-iterate I think if you keep doing the same things you will keep getting the same results. Over the last 2 days i have heard of 3 people who now have their big toes now in the shipbroking door.
ReplyDeleteHopefully, if you have bought the E-book, you will see that their are many ways to skin a cat.
Good Luck and keep the faith!
Ps - Feel free to email me directly and maybe i can give you some personal pointers
Yours
VS
Howdy,
ReplyDeleteHmmm, I'll "lift my kimono" and reveal my juban, er, information source first: The Economist: Shipbuilding, Sink or Swim; Mar 28th...okay...it's a simple source.
Q. If you believe the 'fleet' has recently doubled and 453 ships are floating empty, waiting outside SE Asia, how much can China do to the BDI rate? With more ships being built, it seems like the used ship value will eventually equate to shipbuilders health? (FWIW, the accompanying 'gross tonnage completed' chart is hyperbolic, which has a nasty habit of resolving by falling faster than it went up, an ugly prospect.)
Then there is the currency angle...
Your comment about steel is 50% of cargoes is very interesting...thanks
Howdy 'Partener' - quoting my favorite Peter Sellers Movie!
ReplyDeleteThe BDI is, like most economic indicators, in for a tough ride. At the end of the day shipping demand is a derived demand from commodities. We just have to see the extraordinary events/outcomes in London atm to understand that no-one really knows where this thing is heading.
China is of massive importance to the health of world trade and hence the BDI. What we need to be careful of is compartmentalising China in terms of there demand for Iron ore and coal. For China and other to survivie and prosper they also need the ying not just the yang. In other words we need to keep buying their goods! We are all in this together and economies are inherantly codependant on eachother and on subsets within each economy.
So in short - The BDI is in for a tough time. Shipowners are in for a volatile and tough time. There will be lost of consolidation over the next 2 years - that I can guarantee. Many ships slated for building will not see the light of day (chinese yards already going bankrupt) and many more older ships will be laid up. Eventually equilibrium will return but when this happens is anyones guess.
Thanks for your contribution - nothing wrong with the economist, I read it myself!
Yourds