Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The market rally of the past month is not totally over, but it does seem to be losing momentum. The Baltic Freight Futures appear to be adjusting downward to better mirror what is happening in the physical markets. The Capesize vessel market took the biggest hit this week and now the 2017 outlook is looking gloomier for the capes. It was the Capesize and Panamax markets that led the recent market rally. The Handysize and Supramax vessel markets are holding up better than others as these are thinner and more specialized markets.
However, when you look at the forward curve for all Dry-Bulk vessel types you notice a distinct inverse relationship to current spot rates. So, there is obviously a lack of market confidence in the ability of rates being able to sustain current values. I hope vessel owners take full advantage of what they can extract in the near-term.
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 Thailand.
