This is wild! It’s what’s driving the Baltic Dry Index to test the old lows. From Daily Mail, (ht TPC):
They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia’s rural Johor state, 50 miles east of Singapore harbour…It is so far off the beaten track that nobody ever really comes close, which is why these ships are here. The world’s ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world’s economies.
Do not tell these men and women about green shoots of recovery. As Briton Tim Huxley, one of Asia’s leading ship brokers, says, if the world is really pulling itself out of recession, then all these idle ships should be back on the move. ‘This is the time of year when everyone is doing all the Christmas stu ff,’ he points out…A couple of years ago those ships would have been steaming back and forth, going at full speed. But now you’ve got something like 12 per cent of the world’s container ships doing nothing.’
The Baltic Dry Index of shipping costs has been dropping lately…if this trend continues, we will revisit the lows. This index is often followed because it is a record of shipping costs to transport the goods that are produced (or not produced) worldwide – that is impossible for any government to “massage”.
The Baltic Dry index is a little manipulated number which measures the cost of world shipping. There is little to indicate a recovery in economic activity in the chart below:
