Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Dry-Bulk markets may have hit bottom, at least for the time being. On Monday, Capesize rates dropped to their worst levels since 2016. Tuesday showed improvement with Capesize daily hire rates bouncing off a low of $2,500- 5,000/day based on the route calculated. Panamax rates rose to more than $7,000/day for Q2. The overall outlook for ship owners, however, remains uncertain and worrisome. There is growing chatter as to who will and will not survive this market. Dry-bulk and container line consolidation is inevitable. PIERS data showing that March imports from China dropped by 40 percent year-over-year.
Current market conditions are a function of COVID19, very low fuel rates, and the soft global economy. Though world ports are increasingly concerned about COVID19 safety protocols, most are operating efficiently and there have been few meaningful impediments to international trade. Argentina, of course, has its own confusing situation which needs to be watched carefully; but exports there are currently moving.
