Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: They said rates were too low and could not go down any farther, and yet, here we are. Vessel owners continue to ask, “are we there yet, have we finally hit bottom?” Dry-bulk markets have not yet found support despite some positive demand news. The drop in freight markets over the last 5 months speaks volumes about the health of the Chinese economy and the outlook for improved cargo demand. Vessel owners are now complaining that rates getting below operating costs. The technical FFA freight charts look bearish, but physical markets are saying the downturn must stop. Notably, vessel speeds are slowing to conserve fuel.
March Panamax daily hire rates are trading at $10,800/day with Q2 2023 at $13,200/day. U.S. Gulf to the Far East traded at $12,000/day recently.
All hopes for an uptick in rates remain dependent on improved demand for all dry-bulk cargo to China. Other markets cannot pick up the slack.
