Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting:This week was a bit of a mixed bag for world ocean freight markets. The situation improved a slightly in the Capesize iron ore trade between West Australia and China, but only modestly. The Panamax market in the Atlantic and US Gulf seems to have stabilized at slightly lower levels. The Pacific market for Panamax’s is still a dog and not providing any relief for vessel owners. We remain at price levels that cause vessels to steam slowly and or sit and wait for better possibilities. The Capesize sector is now getting about $9,439/day with Panamax vessels earning close to $4,750/day for deferred positions. The spot market continues to trade at a substantial discount. From both a vessel owner’s perspective and that of the charterer, one of the big questions now is who can weather these tough financial times and who will go bankrupt?
The long awaited freight recovery is taking a lot longer then owners or their banks anticipated, and the light at the end of the tunnel is not yet visible. The below rate indications are for the 30-45 day market; spot prices can be lower and vessel offers out into September and forward positions will definitely be higher.
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 2013 annual totals versus January-May 2014 container shipments for Thailand.
