Baltic Dry Plunges 8%, Near Most In 6 Years As Iron Ore At Chinese Ports Hits All Time High
March 16, 2014 2 Comments
Baltic Dry Plunges 8%, Near Most In 6 Years As Iron Ore At Chinese Ports Hits All Time High
Tyler Durden on 03/12/2014 16:34 -0400
It would appear record inventories of Iron ore and plunging prices due to China’s shadow-banking unwind have started to weigh on the all-too-important-when-it-is-going-up-but-let’s-blame-supply-when-dropping Baltic Dry Index. With the worst start to a year in over a decade, the recent recovery in prices provided faint hope that the worst of the global trade collapse was over… however, today’s 8% plunge – on par with the biggest drops in the last 6 years – suggests things are far from self-sustaining. Still think we are insulated from the arcane China shadow-banking system, which suddenly everyone is an expert of suddenly? Think again.
Why? Perhaps the following chart showing Chinese iron ore steel stockpiles at the country’s 34 major ports will provide the answer:
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Shipping Stocks, SEA, relative to the Baltic Dry Index, $BDI, that is SEA:$BDI, is trading quite high; and is going to plummet, driving bulk shipping rates down further; there is coming a wipe out of shipping companies; these will be the first going into the Pit of Financial Abandon.
The reason why Shipping stocks are trading high relative to the Baltic Dry Index, $BDI, is because Credit Madness, has sustained the EURJPY Currency Carry Trade Investments, such as Luxottica, LUX, Shipping Stocks, SEA, such as KEX, TK, TOO, TGP, SFL, GLNG, GLOG, SBLK, CMRE, NM, DLNG, GLBS, CPLP, GASS, Eurozone Nations, such as Netherlands, EWN, and the European Financial Institutions, EUFN, such as Switzerland’s, UBS, as well as the Design Build Companies, FLM, such as Switzerland’s FWLT.
The EUR/JPY is about to unwind as investors derisk out of the Euro, FXE. which closed at 136.95 on Friday April 2, 2014; look for great deleveraging rewarding stock market short sellers
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