Forecasters expected a robust performance in the dry bulk shipping market for the second half of 2014, but a market recovery has failed as of yet to materialize. A number of less than favorable variables have eroded those early predictions. Factors such as a steep drop in iron ore prices, by as much as $40 per ton since the year’s start, were thought to increase iron ore movement, but record-breaking stockpiles of iron ore at China’s ports and Australia’s emergence as a pre-eminent iron ore supplier have precipitated a steady decline in BDI. By mid-month, BDI was down by 10% standing at 732 points, continuing its slow decline. Shipping vessel rates followed suit, with the Panamax below $5kpd and Capesize below $9kpd. Australia’s spot charters are up by 31% from the same time a year ago, negatively impacting the performance of Brazilian and other shipping countries. Adding to the fire is China’s decreasing coal imports and growing coal stockpiles, such as at Qingdao port where stockpiles are up by 47% from the beginning of the year. Chinese regulators have tightened up trade financing regulations, negatively impacting the performance of Panamax and Capesize, with year to date losses of 68% and 78% respectively. A weakened Chinese housing market is also not helping. All of this comes in spite of an environment that should have been a boost to the BDI: strong steel output by the Chinese, lower growth in vessel supply, and a very robust Chinese IP. China’s steel production grew by 4.3% over a year ago. Steep declines in iron ore prices resulted in more Chinese imports, and vessel deliveries decreased by 27%. While we are still early into Q3 2014, the longer we have to wait for the recovery, more and more optimists for for second half 2014 shift their focus to Q4 2014 or fall off the 2014 recovery bandwagon all together.