The Baltic Dry Index may not be common knowledge but it is an important early indicator of possible signs of recovery in global trade according to Globe and Mail reporter Brent Jang. The index surveys the price of transporting raw materials by sea.
If the latest rally – four straight days – has staying power, then global trade appears headed for a modest improvement in the second half of 2009, and the shipping industry is poised to ride China’s economic stimulus package and recover from what’s still expected to be a turbulent first half.
Despite some contradictory signs of whether the ocean shipping sector has bottomed, there are enough bright spots to clear the way for a gradual rebound in everything from bulk commodity markets to dismantling old ships to building new ones, experts say.
A decline in commodity prices has coincided with dwindling stockpiles to spur China to renew selected purchases, helped by loosening short-term credit, said Oslo-based shipbroker RS Platou.
“This has especially been the case of iron ore, where Chinese steel mills have been very active securing high-quality ore at very attractive prices. In addition, exports of grains, soybeans and fertilizers have all increased in the same period of time,” said Platou’s analysis, titled A Sustainable Improvement?
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