Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: There was a big jump in ocean freight indices this week, with a bit lighter move up in physical voyage charter rates. Market excitement was mostly focused on the Capesize and Panamax vessel freight markets and less so in the Supramax and Handymax sectors.
The Baltic P2 and P3 Panamax indices ran up in increments of 400-500 points per day this week. So…everything is bullish now? Most indices rose to highs not seen since November 2014. But, interestingly enough the Baltic S1C Dry-Bulk Supramax index from the U.S. Gulf to China-South Japan dropped in value each day this week. This caused quite a divergence in market spreads. Chinese coal and iron ore/steel demand due to “restocking” was the main demand factor behind the rally.
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 January-December 2016 annual totals for container shipments to Indonesia.
