Global Spot Chartering Activity Remains Relatively Firm

Through the first three days of this week, the Baltic Dry Index has decreased by 30 points to 863 points. This represents a decrease of 3.3% from the end of last week. In total, 47 cargoes have been chartered in the spot market so far this week. In comparison, 48 cargoes were chartered during the first three days of last week. Dry bulk freight rates have increased in the panamax and supramax segments, but have come under pressure in the capesize and handysize segments.

Handysize Fleet Growth Remains Very Low

63 dry bulk vessels were delivered in June, a moderate increase from the 54 dry bulk vessels that were delivered in May. June saw the delivery of 21 handysize vessels, 20 handymax vessels, 15 panamax vessels, and 7 capesize vessels. In comparison, May saw the delivery of 18 handysize vessels, 14 handymax vessels, 15 panamax vessels, and 7 capesize vessels

25 dry bulk vessels were demolished in June, a small decrease from the 31 dry bulk vessels that were demolished in May. June saw the demolition of 20 handysize vessels, 2 handymax vessels, 3 panamax vessels, and no capesize vessels. In comparison, May saw the demolition of 14 handysize vessels, 3 handymax vessels, 7 panamax vessels, and 7 capesize vessels.

Through the first six months of this year, the handysize fleet has grown by a net addition of only 27 vessels (106 have been delivered while 79 have been scrapped). While handysize rates have come under steady pressure due mostly to Indonesia’s ongoing mineral ore export ban, it is encouraging that handysize fleet growth has stayed low.

Indian Coal Imports Expected to Surge

Thermal coal stockpiles at India’s power plants have continued to decrease and now stand at only approximately 12.2 million tons. This is 5.9 million tons (-33%) less than was stockpiled just two months ago and marks a large year-on-year decline of 8.1 million tons (-40%). It remains very encouraging for thermal coal import prospects that India’s coal stockpiles have continued to decline and remain at a low level not seen since February 2013. Overall, a large surge in Indian thermal coal imports is likely to occur soon which will help the panamax, supramax, and capesize segments of the dry bulk market.