Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Though global freight markets remain far away from any true recovery they will, and are, bouncing around with every small increase in demand – even if it is only temporary. So, charterers will have to endure some degree of volatility as they pick their opportunities to buy freight. The U.S. Gulf to Mexico is a good example of this, as during the past 6 months this short-haul route has seem freight fixed from a low of about $9.50/MT to a high of $13.75/MT. Ocean freight buyers will certainly have good opportunities to lock in attractive freight as we go forward, but they will have to manage market volatility in the process.
An uptick in demand for Capesize vessels pulled the market up this week and the Panamax sector followed. Most of the action occurred in the Atlantic. Buyers of Handy size freight (25-38,000 MT) need to be the most careful as this sector is showing the strongest owner returns in this depressed market.
Average daily earnings for Capesize vessels moved up to $6,286 this week. The average daily earnings for Panamax vessels increased $4,768 per day. According to Norden Shipping, 5-7 percent of the current Dry Bulk fleet could be scrapped by the end of 201. World fleet growth is estimated at 1-3 percent this year. BIMCO expects the container shipping fleet to break the 20 million TEU barrier soon. Container shipping TEU capacity increased by 240 percent over the past 10 years. At the end of 2015 it was at 19.7 million TEU.
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 Vietnam.
