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Baltic Capesize Index Surges: A Step Towards Industrial Recovery?

I am going to disagree a bit with our friend coprophagous. The writter of the article is correct when he states that companies like Genco have their fleets out and working - over 95% are signed up for at least the next 6 months if I am not correct and well over half of Genco's fleet is signed up for the next 18 months. As for the new ships he states that are coming on line - I question that number as well. Brownfield shipbuiding yards are just not being built because they could not get financinig so those orders are canceled. On top of that, ship companies who have signed contracts for ships are canceling those contracts because they cannot get credit or they just see this as the wrong time to be buying new product, so that takes another chunk of new ships out of the equasion. The ships that are left, outside of Genco, Diana, Eagle, Dryships - the big players who have mostly young fleets, are old and are not as efficent to operate. They would start scrapping these old ships but again - no credit to buy them on the part of the scrapyards and the price of scap right now is low because of low demand for steel.
The BDI just could not go much lower. We know the Chinese were playing games last year after the Olympics - in my view they were sticking it to Vale for attempting to raise ore prices by a further 10% in the middle of the already agreed upon contract that already had signifigant price increases. I read an artilce a few weeks ago that Vale had recinded the price increase and they were agreeing to ship the ore to China at their cost. The Chinese will not be played for chumps again and they are showing that they will pay reasonable amounts for ore - and if not, they are not adverse to shutting things down until costs fall back in line. Last fall was a cannon shot across the bow for the ore manufacturers to let them know who is in charge and to not be so damn greedy and that maybe why the ore provider in Australia that coprophagous mentions in his article went bust - caught up in China's power play. Thats my take anyway.
In the end - the Chinese have pledged 500 Billion dollars in economic stimulation NOW and for them that does not mean fooling around with the Central Bank - that means infastructure and jobs. They have to keep their GDP growth above 6% or they end up with civil unrest. Keep the people working and things are at peace. They are building thousands of new mies of railway, they still have to rebuild the area devastated by the earthquake last year - thats hundreds of appartment buildings, schools, hospitals, factories, homes, bridges etc. On top of that, they have committed to build 102 new cities - cities that do not exist now, each city to house over 1 million people, over the next 20 years.
Where are they going to get the ore, the copper, the concrete, the coal etc. to build these cities. Oh ya - by importing the raw materials on Dry Bulk Ships.
The index is moving up and the fact that the ore miners and China have decided to do this years contract 4 months ahead of time shows that things are ready to ramp up slowly.
Will the Drybulk index hit the highs of last May - I personally do not think so - but they will go up. I will be happy if they get to 50% of where they were last May. Many feel the bottom has been hit on the BDI. We shall see.
And finally - those 300 ships sitting in harbour - they are, I am willing to bet, spot charters and they are old ships that under normal economic circumstances, would be headed to the scrapyards anyway. They are too expensive to run and maintain at the present rates. Lets remember - the big players, Genco, Diana, Eagle and Dryships are not spot charter players - they hold long term contracts with the creme de la creme of the charterers, and they will all do well as the Chinese and India in the case of Eagle, start to ramp up production for domestic use. Thanks for reading and a Merry Christmas and Happy New Year to all.