Tag Archives: USA

container ship at abu dhabi ports

2015 Will See an Increase in Demand For Shipping Containers

A recent research study conducted by Barclays suggests that the recent drop in oil prices is boosting consumer spending, and in turn increasing the United States’ demand for Chinese imports. Based on the positive data presented in their report, the investment bank has increased its container volume growth forecast (for the U.S. market) by nearly 1 percent, raising it to 5.4 percent for 2015. From a global perspective, world container trade reached an estimated 152 million TEU in 2014, and is forecast to grow 6.5 percent over the next two years.

A Barclays research study suggests that the recent drop in oil prices is increasing U.S demand for Chinese imports Click To Tweet

Brent crude oil prices averaged $110 per barrel From January 2014 through September 2014, and then values very quickly plummeted to approximately $40 per barrel. Looking ahead throughout 2015, Barclays predicts that oil will maintain an average price of $44 per barrel. This is likely to translate into bigger profits for leading container shipping lines, especially those who have invested in Triple E vessels.

For every $10 drop in the per barrel price of oil there will be $1.1 billion in consumer spending on Chinese exports Click To Tweet

According to theBarklay’s sensitivity analysis, this improvement suggests a [potential] increase in China’s exports to the United States of nearly 2 percent. Offering a number-figure for the growth, industry analysts forecast that for every $10 decline in the (per barrel) price of oil, there will be an additional $1.1 billion in consumer spending on Chinese exports.

We expect a potential positive impact of lower oil prices on trade volumes due to higher discretionary consumer income. For example, the Barclays U.S. Equities Research team estimates that a 20 percent decline in fuel prices could increase U.S. consumption by $70 billion.- Barclays

Barclays recognizes that lower oil prices are having a positive impact on consumer demand and the global container shipping industry is experiencing a boost in profitability. Barclays’ analysts say they expect the economic prosperity and investment in global trade to continue into 2016 and throughout 2017, resulting in a 5.2 percent year-over-year improvement in container demand.

Barclays' analysts are forecasting a 5.2 percent year-over-year increase in worldwide demand for shipping containers. Click To Tweet

Trade to the United States is not the only international destination to increase their demand for Chinese goods. Trade between China and Iran (for example) has been growing at a rate of nearly 40 percent per year since 2012, driven by rapidly rising demand from consumers. The import of household goods from Asia, mainly into Iran and UAE, has caused container volumes on Asia to Middle East and Asia to the Indian subcontinent trade routes, to experience a significant increase. According to analysts, this upward trend in the demand for shipping containers will continue at a rate of 7.4 percent over the next three years, and easily outperform Barclays’ global container growth forecast of 5.2 percent.

economic growth in the United States

The Advantages of Investing With a Strong U.S. Dollar

Over the past year, the United States dollar rose 9 percent compared to the Euro. These are the first major, positive movements of the dollar, since the economic crash in 2008. The rise in the value of the dollar is also the best sign for a positive recovery in the United States. That being said, some market analysts believe that a rising dollar is a sign that investors should shift their investment portfolio’s focus to more appealing investments that will, maximize gains and earn a steady return.

Throughout this blog post, I will guide you through some of the best investment opportunities, based on the strengthening of the U.S. dollar. Please be mindful that these ideas are based upon current economic conditions, and not a guarantee of future success.

What should you invest in now?

Given that the U.S. economy is growing stronger than analysts expected, the long-term outlook shows real promise in three particular areas: shipping, manufacturing and gold.

  1. Shipping- A strong dollar means that goods will be cheaper in the United States. This translates into additional shipping. For the first time in almost a decade, the United States dollar is trending in the right direction. Investing in the shipping containers that deliver economic prosperity around the world, is a great way to profit from economic growth and the strength of the dollar. With all of the established and proposed container shipping alliances, the major shipping companies will be turning a profit as container prices rise and expenses fall.
  2. Manufacturing– The reason why the dollar is stronger is because of a 4.6 percent growth in GDP in 2014. Instead of looking solely at the dollar, consider the economics behind this movement. Who benefits the most from a strong dollar and economy? The answer is manufacturers. Look at the earnings of manufacturers, if you have an interest in investing in the manufacturing companies that are benefiting from a stronger consumer base.
  3. Short Gold– Over the past 10 years gold has risen to as high as $1900 per ounce. Currently, the precious metal sits at $1220 per ounce. Using ETF funds, you might want to short gold as the price continues to drop. Since the U.S. dollar is loosely based upon the price of gold, when the dollar gains, this precious metal loses value.

The Future of the Dollar.

Over the next year [2015], the American dollar is expected to continue to rise steadily, even as Europe continues to be challenged by debt and China’s booming economy begins to slow. This means that investing now, while the dollar is strong, is regarded by some investors as a good long-term investment strategy, that will endure obstacles in future markets and produce above-average returns.