Long cycle Industry-shipping (1)-Baltic Sea Index peak history

First of all, we need to declare that this article is purely a small retail with no foresight and knowledge of ignorance, for reference only.

From the 15th peak in 1947 to the 23rd peak in 2008, the market experienced a total of 9 short cycles, lasting 61 years. Throughout the 66 years of market movements, there have been 10 peaks in total. Compared with the first two eras, the peak time was significantly shortened. According to Martin, during 1947-2007, the average peak period was 2.4 years, the average trough period was 3.2 years, the whole cycle averaged 5.6 years, but the peak and trough period of the form is still very different. The peak period was 2 years, but the 21st and 22 peaks lasted for a long time; The trough was generally 5-6 years, with two major recessions in the late 50 to the late 60 and the 1982-1987 market.

2. After the end of World War II in 1945, undone, with surging sea demand and tight supply of capacity, created the emergence of the 1th post-war peak (the 15th peak), but only for 2 years, as more and more of WWII military shipping ships retired into the civilian market, coupled with the inertia of American shipbuilding capabilities, The market quickly found that capacity was not tense, so tariffs fell and fell to the bottom in 1949. The outbreak of the Korean War in 1950, panic and anxiety caused businesses to start hoarding goods, leading to a substantial increase in the 1951 sea freight, the shipping industry indirectly benefited. But speculation created the long-time, 1952 freight fell 70%, until 1954 autumn market only to improve, 1956 Suez Canal first closed, further pushed higher tariffs, this is the 16th, 17 times the basic reason for the formation of the peak.
4. In the late 50 until the late 60, the market was largely hovering, with 1961-1962 of them described as "worse than the 30 's". The initial economic downturn was the main reason, coupled with the fact that the Suez Canal was re-opened in 1957 and demand for capacity was reduced, and the last peak resulted in a large number of new ship orders just at this point. However, after a 1958-year recession, the volume of seaborne world trade began to recover to 990 million tonnes in 1959, to 1.79 billion tonnes by 1966. It should be said that markets should soon be out of recession, but that overcapacity has become a long-term problem due to the doubling of shipbuilding capacity. It was not until 1967 that the Suez Canal was shut down again, the Gulf oil-producing countries to the Mediterranean, and so on, which led to the return of mineral oil to the tanker market, but more importantly, the volume of world trade shipments continued to grow sharply in the late 60 to the early 70, which brought some turnaround to the market.

6. Market turmoil intensified in the 70 's, with the market experiencing two significant peaks: 19th (1973-1974) and 20th (1979-1981). The former benefited from the tanker market, but when the tanker market collapsed, continued with the stimulus of economic growth to the peak of 1974, the middle and small vessels even extended to 1975 years. Then the market entered a 3-year trough. By the fall of 1978, the market began to recover and ushered in the 20th peak of 1979-1981. The main reason aside from economic growth, there are two special reasons: first, in order to fight high oil prices, the original oil-fired power plant to burn coal, resulting in a surge in cargo volume, second, because of the sudden increase in coal transport vessels caused by congestion, further consumption of usable capacity. The more important reason is that, due to the long depression period, the owners lacked the desire and boldness to make new ships, and the capacity was only slightly increased.

8. After the two peaks, the market had a 1982-1986-trough period, although there was a slight rebound in the middle, but soon plunged deeper into the trough. It is inconceivable that, in such a big bear market, the order of new ships has increased significantly. Japanese Sanko Steamboat took the lead in ordering 120 ships, followed by Greek and Norwegian shipowners. The explanation for this counter-cyclical investment is that the last two peaks were in fact only three years apart, with some shipowners renting out the schedule during the 19th peak period, Enron spent the middle of the depression, and ushered in the 20th peak. The two peaks have accumulated large amounts of cash in the hands of shipowners. Second, the huge amount of oil the bank needs to put out as soon as possible. Third, the shipbuilding industry's capacity is still surplus, in the absence of oil tanker orders, have been falling down to buy bulk cargo orders. The owner of the 1983-year-old shipbuilding industry thinks the market will be the same as the previous one, with the market expected to recover in 1985, when new ships are delivered. The result of this speculation is clear, instead of the 1985 market recovery, shipowners continue to slide down the evil market until the end of 1986.

10. Since 1987, the market began to stabilize, with the recovery of the world economic cycle, the market gradually upward, and in nearly 10 years (1988-1997) to maintain a high level of volatility, there is no obvious rise or fall trajectory, this is the 21st peak. At first, shipowners suffered from the excess tonnage, investment sentiment was reduced, 1992 new ship delivery fell to 4 million tons. However, the market for 5 years in high operation or the owner's investment intention to lift again, 1993-1995 of the 3 years of new ship orders increased by 55 million dwt. The Asian financial crisis of 1997 caused panic in the market, when new ships began to be gradually delivered and the market turned downward again, with pessimism again looming. Interestingly, the market is always joking with people's wishes, the Asian financial crisis lasted not long, especially the harm to the sea trade, to the 2000 spring World industrial production has an unprecedented 11% annual growth rate, the market has seen a small rebound.

12. China's reform and opening up after more than 20 years of continuous development, to the new century gradually began to affect the world dry bulk cargo shipping market pattern, especially at the beginning of this century, a nationwide large-scale infrastructure, further driving the import of raw materials. This is the 22nd Peak (2003-2004) of the driving force, the Chinese factor for the first time to become the world's shipping market influence factors, after the Second World War, there is a rare shortage of capacity. The BDI index from November 23, 2001 to 861 points way up to January 30, 2004 5,551 points, although 2004 years back to 2,742 points, but by the end of 2004 climbed the new peak of 6,092 points.

14. The market surged to a record high of 11,689 points since the release of the BDI, despite a brief fall in 2005 and a fall of less than 2000 points to the summer of 2005. We define this as a 23rd peak (2007-2008). This is also a rare period of capacity shortage in the post-World War II era, freight repeatedly hit a new high, ship owners and shipbuilding industry from the eyes of the past, the sunset industry suddenly became a profit after the real estate industry. As a result, new ship orders burst, the country suddenly added hundreds of new shipyards. In 2008, the market suddenly appeared a huge slump, the BDI index from June 5 11,689 to December 5 to 663 points, a short half-yearly decline of 94%, a record of history.

16. However, the index went up and down over the next few 2009 years to 4,000, while there were significant fluctuations, but the index surpassed the 4,000-point integer mark in the 2010-year period. People think that the market has returned to the original order, the index is attributed to speculative capital speculation on the FFA, the real market supply and demand relations have not deteriorated. In particular, after the climax of many market people subjectively looking forward to the new climax, it is easy to be 2009 years of the illusion caused by the rebound, thinking that the time to the bottom, and in fact, in a trend downward market cycle under the admission quilt.

This article is used only to express my often erroneous views and does not constitute any advice.

Long cycle Industry-shipping (1)-Baltic Sea Index peak history