Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: This is the week that the world markets start to wake up from their Holiday sleep and get back to business. Of course, not everyone is back in their office chair just yet. Jerome Sorrel made the following observation: One-third of the world has been off for the occidental Christmas and New Year holiday, followed by another third of the world off shortly thereafter for the Lunar New Year, followed by another third of the world off for Ramadan. So, it will be difficult to get a lot of clarity out of the market for a while. As best as I can tell most Dry-Bulk shipping routes are off $1,500 to $3,000/day on their daily hire rates this week versus just before the holidays. It looks as if the U.S. Gulf Handysize market is on the biggest loser side of this equation; but it was the strongest on the up side. The Capesize vessel market is the holding its own pretty well, and even moving up a bit, as buyers are trying to get coverage before the Chinese New Year holiday at the end of this month. Though we most likely did make multi-year contract lows and bounced off of them in 2016, it does not appear that we will be making any new 12-month contract highs in the first half of 2017.
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 South Korea.
