Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Though the market remains weak and defensive, things did seem to bottom out this week. After making new lows on Monday the Baltic Panamax Index turned around and showed a little support for the balance of the week. I cannot call this market action a rally, but it does appear that we may have reached a level low enough that no one wants to sell beyond. If you look closely at the poor Capesize Iron ore market you will notice that there was a trade this week from Western Australia to China at $2.25/MT, before things stabilized at around $3.30/MT. It just can’t get lower than that!
My belief is that the market will probably bounce around at current levels until something substantial occurs to improve cargo demand – and that is not likely to happen for many months.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent year-to-date 2015 versus January-December 2014 annual totals for container shipments to Thailand.
