Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Baltic Indices spent the week reversing the market gains of the previous three weeks. Only the Capesize market held its ground and managed to squeak out modest gains.
This market action has is taken a lot of wind out of the sails of those who, once again, thought this might have been the market turn around they have long awaited. Hope does spring eternal, but all that vessel owners are quickly-fading small market rallies. The overall market is still faced with an imbalance of ships versus cargo demand and that is not going to substantially change for many months or even years to come. What has changed is that more charters have switched to buying in the spot market and this will create further seasonal volatility and logistical imbalances.
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 Vietnam.
