Dry Bulk Update

Good morning,

Dry Bulk Update:

The numbers out of London this morning have all four-component indices of the BDI in the green. Once again the market momentum is being fueled by the Cape class driving the BDI up by just under 4%. Looking closer at the Cape routes the major influence was on C 16 (180mt revised backhaul) gaining over 30% overnight. The BCI itself is up settling at a tad under 2400. The Panasisters are catching the Cape wake and firming the BPI to the 700 mark.

BCI 5 T/C ~$15,300

BCI 4 T/C ~$14,500

BPI 4 T/C ~$5,600

BSI T/C ~$6,975

BHSIT/C ~$6,075

Dry FFA:

We see in the FIS report the Capes were up early but some profit taking post index leaves the Cape curve down for the day. Panasisters and Soups are firming on mostly deferred.

Q4-16

Capes $9,900 -450

Pmax $7,000 +200

Soups $7,450 +200

From our man Erik Stavseth at Arctic Securities talks Chinese coal…”Dry Bulk: Cape rates continue to fly high, but Chinese policy intervention is back in town set to contain coal’s price surge – Slowing Chinese mining activity combined with strong steel output has boosted demand for what was labeled a dying commodity, leading coal prices to surge in the past months. Chinese authorities have taken big-boy decisions to curb domestic coal output, with reported cuts of 180-200m tons already, and sending coal output down 10.2% (Y-o-Y) between January and August to 2.18b tons. However, complaints about the price surge from consumers such as power plants and steelmakers have caused the Chinese government to intervene to stabilize prices. Fourteen coal mines owned by Shenhua Group (China’s biggest coal producer) may raise coal output by as much as 2.79m tons this month.”