"Reuters cited Mr Simon Crean Australia's Trade Minister as saying that Australian exporters of iron ore and coal are enjoying healthy sales to China thanks to Beijing's economic stimulus plan, but they could create oversupply if the economy slows.
Mr Crean said that "I think what's important is the stimulus packages that the Chinese government has implemented some AUD 800 billion worth, going significantly into infrastructure is clearly going to be a benefit to Australia's resource industry. He said that and it's true that it might create, in the future, a circumstance of oversupply, but that's only if the domestic economic activity slows." (Steel Guru)
The industry is still dealing with capacity issues, ship breaking fire sales and piracy/protectionism threats, however, Lloyd's List said investment funds are eyeing "cheap tonnage".
"Globally also, some interesting developments are taking place. As reports in the Lloyd’s List suggest, a rather more sedate set of investment funds is moving towards the shipping sector. New investment funds have started raising a couple of billion dollars to take advantage of the distressed prices of shipping assets.
With leverage, it is felt, the funds could muster financial strength of $5-6 billion. The reports also give names of some funds whose managers are believed to be tapping investors, raising hope that a plentiful supply of cheap tonnage is becoming available and that there will be trading profits between entry and exit, the underlying principle being the simple old concept of buying cheap and selling dear." (HinduBusinessLine)
Next check out the technicals. The BDI needs to break overhead resistance and the shipping ETF needs to prove it can trade out of the 7-13 channel.
BDI Rates (Cape, Panamax, Supramax) (Dryships.com)
Claymore/Delta Global Shipping ETF (Stockcharts.com)