I noticed that the shipping index ETFs have been amongst the most bearish of all over the past month or so.
from the Daily Telegraph:
“Port statistics are revealing. They were a leading indicator before the production collapse in the Japan, Europe, and the US over the winter, and they may be telling us something again.
“Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth - mostly in China and Australia - has begun to fall after peaking at 154 in mid-June.
“The Capesize Iron Ore Port Congestion Index is replicating the pattern seen a year ago just before the commodity boom tipped over.
“‘The anecdotal evidence we are hearing is that vessel queues have been falling. There are reports of cancelled tonnage from China pointing to a slowdown in Chinese buying of coal and iron ore.
“‘We are definitely expecting a correction. People have been building stocks of iron ore too quickly in anticipation of the stimulus package in China,’ she said.
“The Baltic Dry Index measuring freight rates jumped 450% in the first half of the year on the China rebound, but has begun to fall back over the last two weeks. (Sen doubts freight rates will recover much since 1000 new ships are hitting the market this year and again next year, compared to 300 in normal years. There is obviously a horrendous shipping glut).”
