Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Dry-Bulk freight markets seem to be quieting down after their recent run up. The Chinese are on holiday this week and vessel owners and operators are looking for the bids that were here last week. The few reported trades that have been seen are at slightly lower rates. All-in-all it looks like the market has simply reversed last week’s gains and is now looking for new direction. Perhaps the market rally has gone as far as needed for the time being?
In addition to China cancelling one-third of their domestic iron ore mining licenses, a good portion of this past market rally has been technical. It is difficult to project that China will continue to grow imports steadily into 2018 without changing policies again. The market also has to be concerned over the recent spate of new-build vessel orders. Will vessel owners paint themselves right back into the same corner?
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 Vietnam.
