Baltic Dry Index

This chart only goes back 5 years, but at 647, the BDI is posting 5 year lows and likely quite a bit longer then 5 year lows.

As far as I know, we were the first to uncover the trend in the usually noisy and volatile index, I didn't see it mentioned anywhere else until at least 10 days after we started seeing the decline and the trending nature which is exceptionally rare for this index.

Again, this is the daily rate published for the average cost of shipping dry goods on container ships, something that is not good for Greece as a major shipper. It is also a sign of economic activity in tangible goods (excludes natural gas, oil, etc) such as commodities like iron ore, cars, computers, textiles and just about anything that is shipped that is not wet.

Remember the Cat and Dogs trades I talked about earlier and the move in shippers of the last few days, both EXM and DHT mentioned as C&D trades earlier today are both at a profit and one of the bigger shippers, DRYS is up nearly 24% in the last 2 days.

Now we have news that shipping rates have gone negative.

Bloomberg reports:

Glencore Gets Free Ship With Fuel Discount as Rates Go Negative

Feb. 6 (Bloomberg) -- Glencore International Plc hired a commodity ship with the operator of the vessel earning nothing and contributing to some of the fuel costs after freight rates for hauling raw materials had their worst-ever start to a year.

Glencore chartered the vessel, operated by Global Maritime Investments Ltd., a Cyprus-based company with offices in London, at minus $2,000 a day for the first 60 days of the charter, Steve Rodley, GMI’s U.K. managing director, said by phone today. The shipment is Australian grains to Europe and it will put the ship in a better position for its next cargo, he said.

“Our other option was to stay in the Pacific and earn poor revenues or ballast to the Atlantic and pay the fuel ourselves,” Rodley said. Ballasting refers to sailing without a cargo.

The C&D trades in shippers are no coincidence.