Global Spot Chartering Activity Has Increased
Through the first three days of this week, the Baltic Dry Index has increased by 5 points to 1002 points. This represents an increase of 0.5% from the end of last week. In total, 72 cargoes have been chartered in the spot market so far this week, which is a very firm amount. In comparison, 65 cargoes were chartered during the first full three days of last week.
Global Grain Trade Forecast Released
The United States Department of Agriculture (USDA) has released its initial forecast for 2014/15 global grain trade. The USDA currently predicts that 339.3 million tons of grain will be exported worldwide during the 2014/15 grain trade marketing year. This is 17.9 million tons (-5%) less than its estimate of 357.2 million tons in grain exports during 2013/14. Soybeans are not officially classified as a grain and are presented in a separate estimate by the USDA. The USDA currently predicts that 112.3 million tons of soybeans will be exported worldwide during 2014/15. This is 1.7 million tons (2%) more than its estimate of 110.6 million tons of soybeans exported during 2013/14.
Port Hedland Tugboat Workers Vote in Favor of Strike
As expected, Port Hedland tugboat workers have voted to go strike. The ballot concerning whether to strike was released this week and the options of going on a one-day strike, two-day strike, and seven-day strike were all approved. No date for a strike has been announced yet, though, and three days notice is needed to be given before any strike can begin. The workers are still negotiating with BHP and Fortescue, however, and it remains to be seen in the tugboat workers will actually go on a strike.
A strike by the tugboat workers would mean a complete stoppage of iron ore exports from Port Hedland (which exports roughly a little over 1 million tons of iron ore every day). While a one-day strike would have only a minimal effect on the market and could be viewed along the lines of a cyclone simply causing a 24-hour stoppage in shipments, a seven-day strike would result in about 8 million tons of iron ore not being shipped during that period. Even worse, miners have suggested that they might be forced to stop iron ore production if a long tugboat worker stoppage occurs due to inadequate iron ore stockpiling capabilities. A long tugboat worker strike would put pressure on iron ore shipments from Port Hedland, which in turn would hurt the capesize segment of the dry bulk market. However, it is widely believed that only a brief strike (if any) will occur.
Indian Power Plant Coal Stockpiles Continue to Decline
Coal stockpiles at Indian power plants have have continued to fall and currently stand at approximately 17.4 million tons. This is 2.9 million tons (-14%) less than was stockpiled at the beginning of April and marks a year-on-year decline of 2.7 million tons (-13%). It is encouraging for thermal coal import prospects that Indian stockpiles have continued to decline and remain moderately lower than levels seen a year ago.