Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Holiday season is upon us. The Baltic Exchange is closed for the week and the shipping market is extremely quiet. I presume everyone is simply enjoying the holidays and trying hard not to think much about business. Given this situation, and the fact that I normally do not publish a report for this holiday week, this will be an abbreviated report. About the only thing that can be said for the markets is that they are indeed thin this week and continue to be soft. I am expecting rates to continue on a lower path when most return to the office next week.
We must also consider that we will soon transition from our Western holidays into the Lunar New Year on January 28. China will be on holiday (Chinese New Year, and Golden Week from January 27 to February 3). This obviously will not aid market liquidity and will keep things uncertain until we return to a normal work schedule. The Baltic Indices and ocean freight rates are unchanged from last week due to the closed markets. U.S. export grain demand from Asia and rail and ocean freight rate spread advantages are increasing vessel lineups in the PNW.
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.
