These 2 charts show why the shipping industry might be screwed

It's no secret that China's growth is slowing. Just a week ago the country's Premier, Li Keqiand, told the National People's Congress China's growth target for 2016 would be revised down to 6.5%-7%. In 2014 it was 7.4%.

A difference of less than 1% may not sound like a lot, but for "capesize" shipping companies - companies which lease ships of over 150 tonnes to transport raw materials - it's proving to be a big deal.

Bloomberg has written a report which explains what a sorry state the shipping industry is in, and two charts in particular really hit home how bad things are.

The first shows how much earnings have dropped for leasing a capesize ship:

At this point, you might think shipping companies just have too many ships and should sell off their surplus. But again we have the same problem: vessels are now worth less than ever. In fact their value is almost 50% less than their peak in 2014.

Unsurprisingly, share prices in the big shipping companies have crashed over the past year. Star Bulk Carriers Corp shares were $0.85 (£0.60) on March 10, while Golden Ocean Ltd were even lower at $0.69 (£0.49).

Short of a miraculous uptick in worldwide demand for goods, analysts say the only course of action is for shipping companies to junk their vessels. A record 85 ships were scrapped last year, but shipping analyst Herman Hildan says 340 would have to go in 2016 to get earnings back to normal, according to Bloomberg.

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