Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: Bullish sentiment in dry-bulk markets continues to rule the day. Paper traders are holding on to their perception that global economies are improving and that this ought to lead to better cargo demand for 2021. Paper traders believe there should be a post-pandemic rally and they want to be first onboard. For the moment they do not seem to care if physical markets follow in lock step or not. One shipping writer likened this to “running of the bulls”.
It is indeed difficult to find much fundamental support for this large rally and many are questioning how long and far it can go. But we all know that momentum is a strong force in any market, and it must be respected. Aside from monitoring the raise in freight indices, the market will have to watch to see if vessel owners make the mistake of rushing out and ordering a lot of new vessels.
Capesize markets are readjusting and gaining on the Panamax sector while the Handysize and Supramax sectors are also still trading stronger than Panamax markets.
