The shipping industry: Low rates on the high seas

Posted: March 13, 2015 in economy
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Made in China?

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The shipping industry


A slump in shipping rates reflects the chronic optimism of shipowners

OLD salts interpret low-flying seabirds as a sure sign that a storm approaches. For some observers the Baltic Dry Index (BDI), which tracks the cost of shipping iron ore, coal, grain and other materials, is delivering much the same message about the global economy as a wave-skimming albatross. Last month it hit a 30-year low (see chart 1). Yet its decline says more about the predicament of those who own the vessels that carry such cargoes than it does about economic growth or the prospects for world trade. For container ships, which move finished goods, and oil tankers the outlook is less gloomy.

True, fresh signs emerged this week that China’s economy is slowing. Growth this year may be 7% or less, compared with 7.7% in 2013 and 7.4% in 2014. China absorbs three-fifths of the world’s ship-borne iron ore—the most commonly carried dry-bulk cargo—and a quarter of its coal. Yet this alone does not …<div class="og_rss_groups"></div>

via Economic Crisis


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