Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Tonight, Friday in Asia, starts the TET or Lunar New year. This means that the markets are getting quieter as we head into the Asian holiday. I did not see much change in vessel daily hire rates or market rates in general this week. The Capesize market backed off a little. Panamax and Handymax markets slipped lower early in the week but recovered most of the losses by week’s end, resulting in a mostly unchanged situation. The Panama Canal is still favoring container, LNG, car carriers and crude oil vessel schedules over dry-bulk through the new locks, and this has created an unfavorable situation for the bigger dry-bulk vessels; hence why we don’t see them utilizing the new locals.
On the container side: Alphaliner reports that “Boxship deliveries will outpace scrapping two to one in 2017. Some 78 percent of the 1.69 million TEU of new container capacity scheduled to be added to the fleet is concentrated on ships above 10,000 TEU.” This is not going to help container rates nor ship line financials.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent January-December 2016 annual totals versus January-December 2015 annual totals for container shipments to Malaysia.
