Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Ocean freight values bounced around this week but did not move very far in either direction. The Capesize market fell back a bit while the Panamax and other markets were mostly stable to slightly better on the voyage market sector. We remain in the slow summer period and are still 45-60 days away from the North American fall harvest. The biggest concern in the markets this week is the slide in the Chinese and U.S. stock markets and the economic implications that come with this. If global economies are not growing and expanding at a good rate, cargo demand will not increase and the surplus in shipping capacity will not be absorbed. This does not bode well for shipping company financials – nor my IRA retirement account. For me this means I’ll probably have to work more years until retirement. For the shipping industry it will likely mean that many need to retire and get out of the business sooner.
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 Hong Kong.
