9. Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: This week the Baltic Dry-Bulk Index suffered its biggest single day fall in close to four years.
In Q4 of 2017, vessel owners saw a market reversal and improved cargo demand with resulting higher market rates. This caused market players to get a bit overly optimistic about the prospects for 2018, especially considering that the first quarter of any year is usually the slowest period. So, here we are in Q1 of 2018 and things are not looking quite as robust. Markets have had to give a little back and, from a cargo demand perspective, we will likely see a fairly quiet couple of months before demand kicks in again. I do expect to see Dry-Bulk rates climb as we move farther into 2018, but we will have to go back down a little before we experience a further recovery in rates.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent 2017 annual totals versus 2016 annual totals for container shipments to China.
