Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Baltic indices continued to rally this week, albeit at a slower rate of increase than last week. But, once again the physical market did not move by the same degree of change, so the physical ocean freight market is lagging behind the Baltic index movement. This is no surprise and certainly not unusual. We did, however, see a slight uptick in physical rates and that is reflected in the freight matrix chart below. Over the past month daily hire rates for Dry-Bulk Panamax vessels have doubled as they moved up from $2,400/day to just over $5,000/day today. Without question the recent improvement in daily hire rates has been helpful to vessel owners, but it has not taken them out of the financial woods yet. We will have to see if this rally can be sustained, or improved, and see how many vessel owners take advantage of the rates before they potentially drop again.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent year-to-date 2016 versus January-December 2015 annual totals for container shipments to Japan.
