Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It was a good run, but the Baltic Panamax Index in the Pacific (P3A) topped out on October 10 at 17075 and the P2A index in the Gulf-Atlantic topped out on October 22 at 27030. It is mainly the decline in Capesize vessel demand and the resulting lack of need to split cargoes down into the Panamax and Supramax markets that is causing the change in Panamax freight values. Capesize vessel demand has been negatively impacted by the anticipated slowdown in Chinese iron ore and materials restocking efforts. This has greatly slowed the demand for big vessels out of Australia and all but stopped the chartering interest out of Brazil.
So we’re at least temporarily back to a surplus of vessels and soft freight markets. Every side of the market has its day and it’s now turning back to a buyers’ market.
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 Japan.
