Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: World dry-bulk ocean freight markets moved lower this week. The Baltic BDI and other indices are below last week’s levels, and the surplus of ships versus cargo is again evident. Capesize spot rates have gone from $5,000 per day four months ago to over $40,000 at the end of September, and are now back down to $16,500-$17,000 per day. That’s quite a rollercoaster ride! The Panamax market is suffering from a lack of need in the capsize market to reach down to split cargoes. The Baltic Supramax and Handysize markets, however, are continuing to move up. The vessel queues in Brazil are getting lighter, as a report from SSY showed that the number of Panamaxes waiting to load grain in Brazil slid to 48 at the end of October, from 75 in early October and the 2013 peak of 127 in mid-April. This is sharply different from last year when only 15 Panamaxes were queuing at these grain terminals. On the other hand, Panamax vessel lineups in the U.S. PNW are increasing. Heavy vessel congestion at PNW grain elevators has resulted in a shortage of Panamax-size anchorage spaces on the Columbia River. Baltic indices and rates seem to be bottoming out for the moment.
The below Panamax vessel fixtures from the U.S Gulf to China are a good example of how one can’t place a perfect figure on vessel rates. The two fixtures we done within two days of each other and are for the same terms with laydays within 15 days of each other – yet they are $5.25/MT apart.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent January-December 2011 and January-December 2012 annual totals versus January-September 2013 year-to-date container shipments for Malaysia.
