Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It was a fairly quiet week in dry-bulk freight markets. The price support that was present over the last two weeks faded. As the Capesize vessel sector dropped back, it pulled the Panamax sector with it. So, in the end, we have basically erased the gains of the first half of the week and returned to the levels of last Thursday.
Now we wait to see who blinks first: buyers or sellers. Market sentiment is still upbeat, so even if we slip back a bit in the month of March we are likely to see gradually rising rates as we go into the second and third quarter of the year. All this is, of course, dependent on not getting into a significant global trade war; that would be very damaging for all. Buyers of containerized grains should also expect to be subjected to higher freight cost as we go forward.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to South China:
The charts below represent 2017 annual totals versus 2016 annual totals for container shipments to Hong Kong.
