The Baltic Dry Index (BDI) collapsed in 2008 and into the summer of 2009, then rallied sharply the past 2 months. This has encouraged some to conclude that global shipping is now in recovery. The problem is that as a leading indicator the BDI has become distorted recently to more of China stimulus indicator than a global trade indicator. Less than 10% of bulk imports have been coming to America, with about 50% going to China for stimulus driven stock-piling and re-stocking. In addition an unusually large surge in new ships coming on stream this year and next is likely to drive shipping prices down again over the coming months as many vessels bid to carry below-trend global trade volumes.
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