The Baltic Dry Index Hits a New Record Low

I was once a pretty active investor in a few dry bulk stocks. Some of you might recall my adventures in OSG, FRO and BALT–utter disasters.

One of the CEOs that I’d speak to was a supreme asshole. He used to tell me “if you’re not bullish on China, don’t buy our stock.”

Dry bulk is a China play, especially iron ore. At the moment, China has zero interest in iron ore, with demand staggered to 20 yr lows. Look at the share prices of AKS, CLF and VALE as proof of this theme.

As such, the day rates to ship this stuff to China hit another record low today.

For a while, people ignored the BDI as some sort of oddity, more to do with an oversupply of ships than a China growth concern. However, it appears the BDI was right all along, in predicting a massive Chinese slowdown.

As this Chinese story develops, you should probably keep a closer eye on this, as one of many indicators of how fucked the great walled, dog eating, nation truly is.