Not convinced Chinese trade is a disaster? Take a look at these shipping numbers

China – which overtook Japan in 2010 to become the world’s second largest economy – dominates the global trade in just about every commodity including iron ore (representing some 60% of the global 1 billion tonnes seaborne trade), copper (38%), coal (47%), nickel (36%), lead (44%) and zinc (41%).

Fast-forward a couple of years and rates, orders and activity in the shipping industry – especially dry-bulk vessels used to haul iron ore and coal – are painting a very different picture:

• The benchmark Baltic Dry Index is down 44% year to date at 958. The BDIY reached a high of 11,793 in May 2008 – that is a 91.8% drop.
• Three-year charter rates for capesize ships which carry 80% of the world’s 1 billion tonne iron ore trade have tumbled to roughly $10,000 a day from $55,000 five years ago.
• Globally prices for Capesize vessels that can carry 150,000+ long tons have slid to roughly $46 million  – half of what it was in 2007.
• Valemax vessels capable of carrying 400,000 tons built for number one iron ore producer Vale are still barred from Chinese ports. These carriers cost roughly $110 million to build – they are now valued at less than $70 million.
• Worldwide orders for dry-bulk vessels dropped 49% to 9.8 million deadweight  tons in the first half of 2012.
• The share price of Rongsheng Heavy, China’s largest shipbuilder not under state control, is down 72% over the last 12 months. Astonishingly, it has not announced a single contract for new ships in 2012.
• The monthly index of new-ship prices in China is now at its lowest point since March 2004.
• China has 1,536 shipbuilding companies. About half of shipbuilders in the country may be forced to close within three years according to state-owned China State Shipbuilding Corp.

Figures from Vesselsvalue.com and shipbroker Clarkson Plc via Bloomberg