China Trade Gap & Shipping Capacity
The trade gap with China fell to $13.9 bln from last month's read of $15.3 bln. The market continues to focus on the possibility of a larger than expected decline in China's GDP this year, impacting demand for basic materials and oil.
Due to construction of new ships and tankers, the global container shipping fleet’s carrying capacity is set to grow by 60% through 2008 and may create an oversupply of shipping space.
A reduction in shipping rates is quite possible especially if China comes in for a hard landing, my sense on the timing would be just after the Chinese Summer Olympics in 2008.
2008 would coincide with the U.S. real estate market hitting an intermediate low after 3 years of 10% per year depreciation. China will also eat some Japanese style deflation in their hyper inflated real estate market, their stock market is already off 50% in the last two years.
Due to construction of new ships and tankers, the global container shipping fleet’s carrying capacity is set to grow by 60% through 2008 and may create an oversupply of shipping space.
A reduction in shipping rates is quite possible especially if China comes in for a hard landing, my sense on the timing would be just after the Chinese Summer Olympics in 2008.
2008 would coincide with the U.S. real estate market hitting an intermediate low after 3 years of 10% per year depreciation. China will also eat some Japanese style deflation in their hyper inflated real estate market, their stock market is already off 50% in the last two years.
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