Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Baltic indices continued to rally upward this week. There has been a lot of technical support and, as is common, the paper traders are pushing things harder and farther than the physical markets.
But; wow, what a rally it was. Three months ago, on 2 June 2017, the Baltic P2 Panamax Index for the Atlantic stood at 11,577. On August 23 is was at 17,193. That is a jump of 5,616 points or a 49 percent increase. Most of it in the index paper markets. One industry reporter questioned if there could be a correlation between the “Charge of the Light Brigade” and the Baltic indices? Supramax vessels in the Gulf and East Coast South America are now getting up to $18,000/day in daily hire rates. Longer term time charter rates are closer to $13,500/day. But things are definitely looking toppy today.
I particularly like one blogger’s comment that “Vessel owners never miss an opportunity to miss an opportunity.” So, will they lock in these good rates and go to the bank or get greedy and wait for something better; or even worse, run out and order new ships?
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 2016 annual totals for container shipments to Japan.
