- SGX freight derivative volumes totaled 53,477 contracts in May (-27% m/m; +303% y/y), while open interest hit a new record averaging 122,427 contracts during the month (+5% m/m; +249% y/y).
- The Baltic Dry Index ended May down 13%, with a decline in rates across all vessel classes, and driven by Capesize and Panamax vessels in particular. Forward curves imply expectations of a relatively muted near-term outlook.
- Following a moderate pullback in freight rates during May, the near-term outlook remains uncertain as the dust settles from recent Chinese stimulus measures and near-term policy direction remains unclear. Strong steel output in recent weeks has been supportive of near-term raw materials demand, though steelmaker margins are reversing recent gains, and a sustained return to negative margins could lead to lower steel output in the second half of the year.
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