Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Dry-Bulk freight markets are looking for some stability and improvement but are not finding much. The vessel owner anticipated Q4 rally certainly did not materialize this year, and with the exception of the Handymax and Supramax markets, the other freight markets are still languishing and waiting for better demand to show up. The Baltic-Panamax index was up slightly on Friday but remained lower for the week.
I saw the following comment in a Tuesday morning Grain market wire, “Brazilian loading capacity will be the issue this year, but we are hearing that Brazil ports will not be loading corn this year from February forward, and capacity will be full tilt for beans.”
From my research this is partially true. Brazil loads the majority of their corn exports in the August-December period and then largely switches to soybeans. But Brazil exports 20-21 MMT of corn and some pre-existing corn sales will be allowed to load during the August-December period. With expected soybean exports of 44 MMT and SBM exports of 13.6 MMT and no significant improvement in infrastructure, Brazil is going to have another monumental challenge in getting commodities out. Guess we should expect overly large vessel line-ups and big loading delays again this shipping season (February-July). Without question, this will soak up a lot of Panamax vessel capacity and cause tightness in available supply for a period of time.
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 Thailand.
