OREANDA-NEWS. SGX Freight Monthly Report - July 2016.
  • SGX freight derivative volumes totaled 36,236 contracts in July (-1% m/m; +15% y/y), while open interest averaged 116,865 contracts during the month (-4% m/m; +156% y/y).
  • The Baltic Dry Index ended July down 1%, though masking divergent trends as Capesize rates declined while smaller vessel classes ended the month higher. Volatility on average remained muted during July.
  • Looking ahead, Q4 is typically a seasonally strong period for Capesize rates. Brazilian iron ore exports – an important driver of Capesize rates – have been higher in Q4 vs Q3 in all of the past five years. While the impact of Vale’s large-scale S11D project is unlikely to be felt until early 2017, the Capesize forward curve implies a stronger than average seasonal uptick this year following the recent decline in spot rates.