Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Do you see any fundamental reason for the Dry-Bulk Indices to be up well over one thousand points this week? I don’t either, but I guess we should remember not to fight the market too hard as it can run right over you. I’m still leery of the justification and staying power for this type of rally late in the year. Vessel owners: this is a gift that you had better take advantage of. Curiously, however, the past six-month rise in Dry-Bulk grain cargo rates has not significantly benefited the containerized grain export business. With the exception of the non-GMO soybean trade, container grain sellers tell me that their business is down year-over-year, especially to major buyers like China, Indonesia and Taiwan. Is this just an issue of timing on the buyer’s part or is it something more? Hopefully it is just a change in timing. Container rates for grain export have not really moved up and shipping lines are asking sellers if they will have sufficient demand to fill empties in the JFM period.
Another question has been: do we have enough bulk export capacity in the U.S.? With Lake Charles doing very little volume and Mississippi facilities ADM Paulina and ADM AMA closed for a period of about one year, I’d have to say we certainly have an excess of grain export capacity in the USA. Vessel lineups in the U.S. Gulf and PNW are not robust. We need business – or we will just carry more grain out another year.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent YTD 2017 versus 2016 annual totals for container shipments to the Philippines.
