Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: This week turned out to be predominately a “give back” week. What the market lost last week, it gained back this week. So, Dry-Bulk markets remain in a fairly narrow trading range without sufficient support to surge higher – nor do we see willingness among vessel owners to drop rates in any meaningful way. The forward curve on the Baltic Exchange shows a bit of hope for rates to improve slightly as we go out into the second half of 2017 – but nothing that should provoke any excitement nor greatly improve the bottom line for most ship owners. If you own vessels you have to hope that 2018 will be better.
In relative terms, East Coast South America continues to be the hot spot as the vessel line up in Brazil grows and more vessels ballast to that market in hopes of better values. The idle container vessel fleet remains large and young container vessels continue to be sold for scrap, but consolidation and shipping alliances have kept container rates from dropping.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent YTD 2017 versus 2016 annual totals for container shipments to Japan.
