Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It was “off to the races” again this week for dry-bulk freight markets. The Baltic Dry-Bulk index reached its highest point since October 2010. Vessel owners have visions of a Freight Super Cycle in play, and, in the words of FIS Freight Investors, they are “singing Frank Sinatra’s 1964 hit song Fly Me to the Moon”. I do not see the full fundamental justification of this outlook, nor do I share their frenzied excitement, but would not want to stand in front of the market right now. Last week, Santos Brazil to China rates were down $5.00/MT, this week they are up $5.50/MT. There should be some sellers at these higher rates.
The rebalancing of Capesize markets versus smaller ships has, for the most part, accomplished its goal. Capesize daily rates reached $36,000 for May while daily Panamax rates climbed from $22,000 to $26,000 in the May slot and $23,750 for June.