Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Most of what I hear in the Panamax Dry-Bulk market is how the “technicals” have been bullish and supporting of the Baltic Index price rally. So, this past upward move appears to be largely technical in nature and not fully supported by the physical markets. It is also interesting to note that the recent rally in the Dry-Bulk markets was not, as is normally the case, led by the Capesize vessel market. That market has actually been soft over the last few weeks. It has been the smaller vessels (Panamax and Handymax types) that have been the market leaders.
The other topic of discussion in the global Dry-Bulk market is about how the Dry-Bulk fleet is depending more on the grains cargo sector for support. If this is truly the case, and Grains only represent 12-14 percent of Dry-Bulk demand, then this market is in a real pickle and will certainly suffer as the harvest season uptick comes and goes. However, the market rally appears to be losing strength and things are now readjusting.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent year-to-date 2016 versus January-December 2015 annual totals for container shipments to Thailand.
