Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Global ocean freight markets are following a very familiar pattern. It is a bit like riding a roller coaster at the park; things go up for a week or two and then they roll back down. Many in the industry are expecting to see a steady market improvement (increase) take hold by the year’s end. I think the general consensus is that things have definitely bottomed out and eventually have to move upward. Of course, this theory is contingent upon continued scrapping of vessels and no increase in new building activity. Can owners do that? They always have an itchy hand that wants to grow the fleet at the first sign of improved economics. Hopefully the banks will keep them from doing that. It has been interesting to watch the Capesize market move in different directions than the Panamax and Supramax markets. This week the Capes were up while the smaller vessels were down.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent YTD 2017 versus 2016 annual totals for container shipments to Taiwan.
