Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting:As you will see in the Capesize and Panamax freight fixtures and rate data below, things are a bit all over the place this week. We have a broad range in what has been reported for the week and this indicates that, depending on your preference, you could call the market up or down. My interpretation of the week’s action is that the market is trying to rally but still having difficulty doing so. When rates move up somehow more freight becomes available. Of course freight markets are still facing the questions regarding the pace of world economic recovery and the related Chinese demand for raw materials. Sinograin is now estimating China’s soybean imports at 66-67 MMT against USDA’s figure of 69 MMT.
There’s a good deal of trade talk about the possibility of Brazilian soybeans that have been cancelled by China working their way to the U.S. East Coast and Gulf. I have heard that some of this is occurring. Handymax freight on the wheat cargoes going from the U.S. Gulf to Brazil is in the $32-33/MT. range. A Panamax cargo would be a couple of dollars cheaper. Coming back up from Brazil to the U.S. Gulf or East Coast with a Panamax of soybeans should cost close to $24-26/MT.
The Canadian port of Vancouver continues to have labor and trucker problems. On the other hand, the Ukrainian grain exporting business continues without problems so far.
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 and January-December 2012 annual totals versus January 2014 year-to-date container shipments for Taiwan.
