Abstract

1、Global shipping seems to be starting a new Jugla cycle, and BDI has set a 13-year high.

2、The sharp rise in shipping prices should be closely related to demand.：

1) at present, the compound annualized growth rate of global imports and exports has increased significantly in the past two years, and the annualized growth rate in June this year has exceeded 6%.

2) but the speed of shipbuilding is slow, and from the known data (container ship capacity), the annual increase in capacity is only about 3%.

3、But the surge in shipping prices is not entirely related to demand.：

1) although the current global import and export volume / capacity is on the high side, it is not very high. At least this figure is the same as that in 2018 and lower than the level before 2014.

2) part of the increase in shipping prices should be related to the decline in shipping efficiency. From the reality of port congestion, this bottleneck may occur in the port, or even related to the port jump caused by the closure of some ports and the isolation needs of some crew and cargo.

3) A supporting evidence is that the data of China's exports to the United States no longer match those of the United States' imports to China.

4、We suspect that most of the freight increases are due to the port, otherwise the corresponding freight should be the level of 2014Q2 or 2018Q1. According to this calculation, nearly 80% of the current freight is caused by the port.

5、But what seems to be happening at the same time now is that high freight rates are driving down global demand for trade.：

1) at present, as far as China is concerned, the level of foreign trade cargo handling at its ports has dropped to an all-time low.

2) even in the extension of this contradiction, the global freight carrying rate and rail freight volume are declining, and the PMI of new export orders from the United States and China are falling at the same time.

6、This does not mean that sea freight will immediately enter the descending channel.

1) the decline in demand is only a limited remedy to the potential supply under the influence of high prices. Prices will not fall because the previous prices are too high, and people cannot lift themselves up.

2) from a financial point of view, global potential demand should continue to be strong, after all, global liquidity is still high (short-end weighted interest rates are low).

7. The subsequent sea freight may rise at a slope and converge, or it may change from rising to stable, but it is difficult for sea freight to fall sharply in the short term. in this state, we need to worry about the gradual increase in the pressure on exports. we even need to pay attention to whether the decline in export demand will have an adverse radiation effect on the long-term global economy.

Text

1、Global shipping seems to be starting a new Jugla cycle, and BDI has set a 13-year high.

Since May last year, the Baltic dry bulk Index (BDI), which reflects the spot freight rate of dry bulk cargo on the world's major routes, has risen all the way, hitting new highs recently, rising from 398points on May 13th to 5650 points on October 7th (there has been a pullback in recent days), an increase of more than 12 times, setting a 13-year high.

2、The sharp rise in shipping prices should be closely related to demand.

At present, the compound annualized growth rate of global imports and exports has increased significantly in the past two years, with an annualized growth rate of more than 6% in June this year; but the speed of shipbuilding is slow, judging from the known data (container ship capacity). The annualized rate of increase in capacity is only about 3%.

3、But the surge in shipping prices is not entirely related to demand.

Although the current global import and export volume / capacity is on the high side, it is not very high, at least the same as in 2018 and lower than before 2014.；Part of the increase in shipping prices should be related to the decline in shipping efficiency. from the reality of port congestion, this bottleneck may occur in the port, or even related to the port jump caused by the closure of some ports and the isolation needs of some crew and cargo.

A supporting evidence is that the data on China's exports to the United States no longer match the data on US imports to China.Because of freight, pricing and other reasons, the amount of goods imported by the United States from China is usually higher than the amount of goods exported from China to the United States, but the two have been upside down since March last year, and the gap between the two has gradually widened in recent months. The year-on-year data reflect this problem more clearly, and the year-on-year gap between the two has become very significant since March last year.

4Most of the reason may be the port

We suspect that most of the increase in freight is due to the port, otherwise the corresponding freight should be the level of 2014Q2 or 2018Q1, according to this calculation, nearly 80% of the current freight is caused by the port.

5、But what seems to be happening at the same time now is that high freight rates are driving down global demand for trade.

At present, as far as China is concerned, the level of foreign trade cargo handling at its ports has dropped to an all-time low; even this contradiction is spreading. At present, the global freight carrying rate and rail freight volume are declining, and the new export orders PMI of the United States and China are falling at the same time.

The decline in demand is only a limited remedy to the potential supply under the influence of high prices. Prices will not fall because the previous prices are too high, and people cannot lift themselves up. From a financial point of view, global potential demand should continue to be strong, after all, global liquidity is still high (short-end weighted interest rates are low).The short-end weighted interest rate is inversely ahead of the global manufacturing PMI new orders year-on-year, with a lead of about 12 to 20 months. According to the downward trend of short-end weighted interest rates in recent months (the opposite number is upside in the chart), the future global PMI new orders year-on-year, the latter still has the momentum to strengthen.

The rising slope of sea freight may converge, or it may change from rising to stable, but it is difficult for sea freight to fall sharply in the short term. in such a situation, we need to worry about the gradual increase in the pressure on exports. we even need to pay attention to whether the decline in export demand will have an adverse radiation effect on the long-term global economy.

The author: Yang Weiyi, source: to our beloved bond market (ID:furoyear), the original title: "the era of Great Navigation: high freight seems to be eroding global growth"