Large Increase in Capesize and Panamax Freight Rates

Through the first three days of this week, the Baltic Dry Index has increased by 192 points to 1,136 points. This represents an increase of 20% from the end of last week. Capesize have found an incredibly large amount of support as the demand for capesize vessels is very at present and availability of capesize vessels is now tight. Capesize rates are currently averaging $14,118/day, a very heathy rate that is expected to rise much further this year. Global spot chartering activity has increased this week. A total of 51 dry bulk 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.

Chinese Lending Remains Strong

Recently released data shows that Chinese banks issued 857 billion yuan ($140 billion) in loans in September. This is 154 billion yuan (22%) more than was issued in August and 70 billion yuan (8%) more than was issued in September 2013. Overall, the first nine months of this year have seen Chinese banks have issue 7.61 trillion yuan in loans. This is 340 billion (5%) more than was issued during the first nine months of 2013. It remains very encouraging for the dry bulk shipping market that Chinese bank loans have continued to grow this year.

Chinese Coal Stockpiles at High Level

Coal stockpiles at major Chinese power plants now stood at approximately 90.5 million tons. This marks an 11 million ton (14%) increase from the start of September and is the largest amount stockpiled since late 2012. The large rise in stockpiles in such a short period is a negative factor for coal import prospects. However, peak winter electricity demand season will begin soon in China which will lead to greater demand for thermal coal.