Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: As mentioned previously, we are in a low-priced, but bumpy, global ocean freight environment. Hope amongst vessel owners still springs eternal, but the oversupply of ships continues to create a ceiling on how high any temporary rally can go. So, what goes up over the course of a week or two eventually comes back down. This has been another bumpy week as the Baltic Dry-Bulk indices slipped back and the physical market moved up slightly in most markets. Maybe the reconciliation will come next week?
It is still a buyers’ market, both for spot and 60-day vessel fixtures and for ship buyers in the used vessel market. It is considerably cheaper to purchase a two-year old Cape or Panamax vessel as opposed to building a new one – and this is a big problem for Asian shipyards.
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 Taiwan.
