Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Global ocean freight markets are a bit all over the place this week. I have seen rates booked on the same routes for the same size and positions that differed by more than $1.50/ton; it seems to be all about how and when you do your negotiating. It is August vacation month in Europe with many out. Nearby markets are, of course, cheaper than the deferred positions.
The Capesize market is considerably lower while the Dry-Bulk Panamax and Supramax markets are up a little. The devaluation of the Chinese Yuan has put a lot of uncertainty into market projections for Chinese raw material imports, and this will surely have a negative impact on ocean freight values longer term. Panama Canal draft reduction from 39 feet, 6 inches (12.04 meters) down to 39 feet (11.89 meters), effective September 8, 2015, means smaller grain cargo sizes from the U.S. Gulf until they get good rains in Panama. China will require importers of barley, DDGS, and sorghum to register details of their purchases under a new system to come into effect from September 1, the commerce ministry said. They may be trying to control imports and encourage use of domestic corn, with one advising firm stating that the future may hold a quota system.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent January-December 2014 annual totals versus year-to-date 2015 container shipments to mainland China.
