Analysis: why this time is really different

The Baltic Dry Index has barely moved over the past month, a fact which has escaped hysterical share traders and expert commentators, but one which is very good news for Australia, especially WA.


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Good point Tim, but could you also factor in the pricing mechanisms for our bulk commodities - especially iron ore, coal and LNG. My understanding is that these no longer rely on a spot market and that a large proportion of output is contracted at fixed rates many years into the future. If that's the case, it reinforces your point that Australia won't (can't) be adversely affected by sudden market reversals. I guess that was the idea behind changing to such mechanisms.

Your observation is truly amazing and I take my hat off to you to wave at you. If you know what you are talking then you should have not written those courageous comments above. Do your research first next time

An excellent article, as usual, by Tim Treadgold. Very good news for WA, but a longer term view of the Baltic Dry Index, which is also a universal shipping indicator, reveals that the global economy is really struggling, going nowhere. Globally, on all other fronts, look forward to ten to twenty years of nothing.

poorly researched article i thought, as has been mentioned already this index has not recovered well from gfc, so it has not got so far it can fall this time. further to this point there is breakeven level below which shipowners will leave their vessels tied up rather than charter them at a loss, roughly at around $1000. the rate actually briefly fell below this break even point late 2009. the index has not been far above breakeven all of 2011. SO it can hardly fall much further now can it.

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