Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting:The Baltic Indices attempted a small bounce rally this week, but it did not hold up and by week’s end things were softening again. I think the market simply got tired of going down every day and needed some up as in addition to the down action. Physical rates have not really recovered and remain defensive. The Dry-Bulk market still requires a firm bid to determine an exact rate. Soybeans from the U.S. Gulf to Rotterdam are close to $15.00/MT freight with Brazil to Rotterdam at around $13.50/MT. Spot markets are cheaper than the deferred. We are starting to see Dry-bulk vessels from Asia ballasting to East Coast South America in anticipation of the developing harvest business from there. That will likely keep those markets cheap. The soybean harvest in Mato Grosso, however, is only 4 percent completed. We have to expect more vessels to decide to layup in Singapore harbor until things improve.
Capesize iron ore rates from Western Australia to China seem to have stabilized at very low levels ($4.25-30/MT). Keep in mind that we are approaching the Lunar New Year, which falls on February19, and this will lead to a full week holiday in many Asian countries.
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 China.
