When commodity prices or shipping rates get too high, the Chinese will simply put off purchasing or negotiating contracts until prices settle down. They have a huge influence on pricing of coal, iron ore and grain as well as the day rates by which those items are transferred across the Pacific Ocean.
Knowing that the Chinese can somewhat manipulate the market allows us to identify our risk. Keep the long-term perspective in mind, though -- China and India need coal, iron ore and grain. Short-term periods of weakness are great times to initiate and add to the carrier positions in your portfolio.
The global economic boom, the progression of the WTO and numerous multi-national wide-reaching trading agreements have afforded the strongest of business conditions for the large-vessel dry-bulk shipping operators. As such, sales and profits are up big and soon dividends will return.
What the Chinese are doing, more closely resembles market manipulation than them accepting the supply/demand pricing of the marketplace. The Chinese economy still has many characteristics of a command economy. It would be unthinkable for commodity buyers in the US to collude in a similar fashion to manipulate the prices of commodities. But with the softness in economies around the world, China's demand is wielding a disproportionate amount of clout. China, like Russia, tends to behave like a bunch of thugs in their trading relationships.
"What the Chinese are doing, more closely resembles market manipulation than them accepting the supply/demand pricing of the marketplace"
What the Chinese businessmen told me was that whenever they come to open market to buy commodities, the traders on the free markets jack up the price. When they come to sell their products, the traders suppress the price. Don't be naive. Taking the advantage of dollar being the world's reserve currency, Uncle Sam is printing tons (TONS!) of money to devalue Japan, China, and Russia's foreign reserve. Free markets work the way it is
Don't be so naive
Sorry I cannot hep buy laugh at some comments people make