Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Just when one thinks the market is sleeping and going nowhere, it wakes up. I guess this is what keeps things interesting?
The Baltic Dry-Bulk, and particularly the Panamax and Supramax sectors have put together a pretty good rally over the past seven weeks. During this time period the BPI has more than doubled (from 522 on June 1 to 1162 today) and now the physical markets are following the trend.
Grain freight demand from South America has definitely picked up. It feels like some East Coast South
American (ESCA) freight buyers, maybe too many, were caught short and forced to enter the market all at once. ECSA and the North Atlantic have been the primary market drivers. The Atlantic is still the leader with the Pacific routes following at a slower pace. The fall in iron ore prices to $40.00/MT has also assisted in creating demand.
According to Allendale Inc., U.S. FOB vessel corn is priced $29/MT over Brazil right now and it would take $10 – $15/MT to ship it up to the U.S. East Coast. This is something the market will be watching as well as the price of feed wheat.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to South China:
The charts below represent January-December 2014 annual totals versus year-to-date 2015 container shipments to the Philippines.
