Thursday, July 9, 2009

Shipping Indexes Flashing Warning Signs

The Fed's most recent money printing slowdown appears to be impacting the shipping industry.

Port statistics were a leading indicator before the production collapse last year, and they may be signalling that a double dip downturn is in the early stages of formation.

Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth — mostly in China and Australia — has begun to fall after peaking at 154 in mid-June.

The Capesize Iron Ore Port Congestion Index is replicating the pattern seen a year ago just before the commodity collapse.

The Baltic Dry Index measuring freight rates jumped 450% in the first half of the year, but has begun to fall back over the last two weeks.

Brace yourself, this may get very ugly.


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