Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Baltic Indices now have a two-week winning streak going. They were up again in a very thin and quiet trade. However, I must once again say that the physical rates have not fully followed this trend. The Capesize market was weak most of the week, and only got a little bump up at week’s end. Most of the value improvement occurred in the smaller-size vessel markets. Keep in mind that spot values are the weakest and can probably be booked at slightly cheaper rates than indicated below.
Although things have bounced upward a bit, I don’t see any meaningful improvement in rates until we get towards the second half of this calendar year. I heard one trade estimate that said all the global freight market needs is 3 billion MT of additional business and it would be profitable again. That, of course, is a big wish that even Santa can’t deliver this year, so vessel owners will continue to struggle in a market that is probably close to 15-20 percent over built.
The average daily earnings for Panamaxes, is $4,699/day, up just $157/day from last week. Supramax average daily earnings are $5,857/day, and Capesize vessels are at average daily earnings of $4762/day, which is slightly lower than last week.
The West Coast PMA-ILWU container port labor negotiations came to a tentative settlement a week ago and are still waiting for ratification by the union general membership. But the ports are back to work at full speed and trying to get through the large backlog.
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 the Thailand.
