Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: I do not see any big changes in Dry-Bulk freight rates this week. The Baltic indices are down a little and it does seem that the past rally is over and that things will now set back a bit. As mentioned previously, the overall market fundamentals are not much changed and it will certainly take time for the global economy to pick up enough steam to create the volume of additional demand necessary to return the market to a profitable stance.
So in the meantime the market will bounce around and wait for better times. The biggest danger remains that of additional bankruptcies in the shipping industry and the risk that your cargo is on one of those vessels. I have received confirmation that 3-4 Handymax cargoes of U.S. wheat (both HRW and some SRW) have been sold to Brazil at rates of close to $15.00/MT. The wheat is going into both northern and southern Brazilian ports.
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 the Philippines.
