Increase in Global Spot Chartering Activity

Through the first three days of this week, the Baltic Dry Index has decreased by 5 points to 727 points. This represents a decrease of just 0.7% from the end of last week. Global spot chartering activity has increased this week and will likely help freight rates find a floor this week and then increase. In total, 62 cargoes have been chartered in the spot market so far this week. In comparison, 54 cargoes were chartered during the first three days of last week. Panamax period activity has also remained firm this week, a total of 5 panamax vessels have so far been chartered for period deals this week.

Global Steel Output Remains Very Strong

Data released this week shows that approximately 137.1 million tons of crude steel was produced globally last month, which is 3.8 million tons (-3%) less than was produced in May but approximately 5.4 million tons (4%) more than was produced in June 2013. Global steel production typically decreases on a month-on-month basis during June of every year (as June contains one less day than May), and it is encouraging that global steel production has remained very strong this year. The first six months of this year have seen a total of 811 million tons of crude steel produced globally. This is approximately 28 million tons (4%) more than was produced during the first six months of 2013.

Colombian Coal Production Expected to Increase Further

Late last week, Colombia’s Deputy Mining Minister Cesar Diaz announced that 2014 coal production in Colombia is expected to total 94 to 97 million tons. This would be an extremely large total, that would very much help capesize rates find a large amount of support. Previously, the Colombian government had been predicting that Colombian coal production this year would total 89 million tons (which would be a large total in its own right, as production totaled 86 million tons in 2013). Should Colombian coal production reach as high as the government expects, an even larger amount of Atlantic basin cargoes will surface this year which will help capesize rates find even greater support during the upcoming months through the end of this year.