Decrease in Most Dry Bulk Freight Rates
Through the first three days of this week, the Baltic Dry Index has fallen by 28 points to 935 points. This represents a 3% decrease from the end of last week. Only panamax rates have been able to find support, with strong coal and grain volume helping panamax rates rise. Rates for the three other vessel classes have come under pressure, with capesize rates coming under a very large amount of pressure. Capesize rates are currently averaging $8,203/day, a decrease of $1,662 (-17%) from a week ago. Panamax rates are averaging $7,282/day, an increase of $321 (5%). Supramax rates are averaging $9,873/day, a decrease of $511 (-3%). Handysize rates are averaging $7,389/day, a decrease of $263 (-2%). Global spot chartering activity has increased this week. A total of 48 dry bulk cargoes have been chartered in the spot market so far this week. In comparison, 42 cargoes were chartered during the first three days of last week.
Larger Amount of Grain Exports Expected
The United States Department of Agriculture (USDA) recently released its latest global grain trade forecast which projects that 2014/15 global grain trade will total 345.1 million tons. A month ago, the USDA projected 2014/15 global grain trade would total 343.5 million tons. It is encouraging that already high expectations for global grain exports have been increased even further. In the last three months alone, the global grain trade forecast has been raised by a total of 6.1 million tons. This time around the forecast has primarily been raised due to even higher expectations for global wheat exports. Global wheat exports are now expected to total 156 million tons, 1.2 million tons more than was forecast a month ago.
Chinese Steel Production Remains High
Recently released data from the China Iron and Steel Association (CISA) shows that average daily crude steel production at China's key steel mills totaled 1.79 million tons during September 21 to September 30. This is the very same level that was reported for September 11 to September 20, and is down only very slightly from the 1.80 million ton level that was reported for September 1 to September 10. Chinese steel production has remained high as largely anticipated. Steel prices remain under pressure, however, but steel profit margins at Chinese steel mills remain improved from the start of the year due to this year’s extremely large decline in iron ore prices.