Ecomike

BDI Signals Slack Demand for Raw Materials

I am not sure but I think you two missed one of my points. I must have seen a hundred or more positions taken lately saying that the BDI is an excellent leading indicator of economic growth, but I think for now there is too much noise going on from new builds hitting the water, dropping the rates, and China buying excess material at low prices, and then cutting way back to live off the excess inventory while prices drop back down, for the BDI to be the world markets pre-indicator anymore. Hell, the last huge run up in CAPex rates, and thus most of the run up in the BDI earlier this year, had a lot more to do with just port congestion in China, and China restocking from their inventories from the September 08 to March 09 crash in imports.

All I am saying is people are reading way too much into the BDI numbers the days. If anything, just look at the recent numbers, and if anything one would conclude it is very volatile.