Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: World dry-bulk ocean freight markets continue to struggle with a basic oversupply of vessels. Over the past few years, the market has staged a rally in the November-December period and vessel owners are hoping for a repeat of that scenario. However, I’m not sure their wish is going to be granted this year. The Capesize market does seem to have stabilized with Western Australia iron ore rates to China holding at close to $9.00/MT. However, there has been no such support in the Panamax sector, which continues to suffer a lack of strong demand and no help from the Capesize market. Keep in mind that the big Panamax market rally back in September-October was primarily fueled by demand needing to split Capesise bulk cargoes, which this is no longer the case. Average daily hire rates in the Capesize market are now $20,148/day verses $12,731/day for Panamax vessels. In sharp contrast, the Handymax vessel market has shown continued strength since last August.
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 Korea.
