Posts filed under “Commodities”

Baltic Index Overwhelemed by New Ships

We haven’t looked at Baltic Dry Index in a while –

Despite the high CRB Index, the BDI has not managed to rally much off its post crisis lows. The reason for this: Massive over-building of new bulk transport ships.

Here’s Bloomberg:

“At a time when analysts anticipate record profits for the biggest mining companies and a third year of gains in commodity prices, shipping lines carrying raw materials are set for the lowest freight rates since 2002.

Leasing costs for capesizes, 1,000-foot-long ships hauling iron ore and coal, will drop 34 percent to average $22,000 a day this year, according to the median in a Bloomberg survey of eight fund managers and analysts. The last time that happened, China’s economy, the biggest consumer of the minerals used in steel and power, was 75 percent smaller and the benchmark Standard & Poor’s GSCI commodity index 67 percent lower.

While Clarkson Plc, the world’s biggest shipbroker, expects seaborne trade in the two cargoes to exceed 2 billion metric tons for the first time this year, the 7 percent increase won’t be enough to eliminate a glut. About 200 capesizes, spanning some 35 miles end-to-end, will leave shipyards this year, expanding the fleet by 18 percent, the Bloomberg survey showed.”


Baltic Dry Index (Arithmetic)

click for larger chart


Baltic Dry Index (Log)

All charts via The Chart Store


Freight Rates Tumbling as 35-Mile Line of Ships Sails
Alistair Holloway
Bloomberg, January 10 2011

Category: Commodities, Transports

Was 2010 Commodity a Rally in a Bear Market ?

Chris Kimble writes: The CRB index had a huge rally from 2002 to 2008, followed by an decline over 50%. The 2009/10 rally took the CRB index back to its “50% Retracement level” as well as two key resistance levels, at the same time. Is a “Head & Shoulders” pattern at hand as well? >…Read More

Category: Commodities, Technical Analysis

Its Too Early to be Bullish on Nat Gas

I mentioned last week that we like the Energy sector, particularly Oil and Coal. The two stocks mentioned Arch Coal (ACI) and SunCor (SU). Several people tagged me to ask about Natural Gas.The bullish argument is rising oil prices will drag Nat Gas with it. The bear case, however, is controlling at the moment. Given…Read More

Category: Commodities, Energy, Technical Analysis

Winding Down with an Xmas Rally

Here we are beginning the final 2 weeks of the year. The economy continues to limp along, improving, albeit rather slowly. “Recession fatigue” is likely to make this holiday consumption spree appreciably better than the past 2 years. Markets have looked a bit tired — and yet — every opportunity to see big whackage has…Read More

Category: Commodities, Fixed Income/Interest Rates, Gold & Precious Metals, Markets, Psychology, Really, really bad calls

Emerging markets: the risks are increasing

Emerging-market equity prices as measured by the MSCI Emerging Markets Free Index are primarily driven by commodity prices and in particular by metal prices as measured by the Economist Metals Price Index. Currently emerging-market equities are approximately 8 – 10% overpriced given the level of metal prices. Sources: I-Net Bridge; Plexus Asset Management. The ratio…Read More

Category: Commodities, Think Tank

Commodity prices – on a knife’s edge

by Prieur du Plessis, writer of the Investment Postcards from Cape Town ~~~ The prices of industrial metals find themselves at crucial levels as indicated by the Economist Metals Price Index in U.S. dollar – the latest number is my estimate. The upward trend since the market bottomed in the first quarter of last year…Read More

Category: Commodities, Think Tank

CFTC Judge Allegations Should Concern Investors

“It’s an open secret among my brethren that if you get Levine, he’s not going to rule for the investor.” -Steven Berk, an investor protection attorney in Washington > Michael Hiltzik of the Los Angeles Times takes Judge Painter‘s CFTC accusation against his fellow judge Bruce Levine to a new level: “It would be hard…Read More

Category: Commodities, Legal, Really, really bad calls

Is Gold a Shadow Currency ?

My friend and hedge fund manager pal Paul Brodsky is quoted in the WSJ discussing Gold as a Currency. “Over the past 30 years, the correlation between the dollar and gold is minus-0.65—a high negative correlation. It means the dollar and gold are effectively on opposite ends of a seesaw. When the dollar is in…Read More

Category: Commodities, Currency, Gold & Precious Metals

CPI, CRB Do Not Disprove Deflation Thesis

I try to find people to read who a) I disagree with 2) respect their methodology. It refines my arguments, and clarifies my thinking. Doug Kass is one such thinker. So too are Jeff Saut of Raymond James, and Peter Boockvar of Miller Tabak (Peter publishes the very fine Macro Notes blog here on TBP)….Read More

Category: Commodities, Currency, Economy, Inflation

S&P500 Priced in Gold

Here’s one for the Gold Bugs: > SPX Priced in Gold click for larger chart courtesy of The Chart Store Note this does not include last week’s market action . . .

Category: Commodities, Gold & Precious Metals, Markets