Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: From a Lunar New Year perspective, it is another week into the New Year and we still have a firm tone to the markets. Vessel owners and markets in general are still hoping for an up year with continued growth in vessel profitability. But, much as expected, things are not taking off like a rocket and the market still has some growing pains to work through. Q1 of the year remains challenging from a cargo growth perspective and we are witnessing a troublesome increase in the number of new vessel orders. The only way for this market to remain on solid ground is for vessel owners to keep their hands in their pockets and not get greedy with ideas of fleet expansion. China has projected annual GDP growth of 6.5 percent and this will be enough to support freight markets if the Dry-Bulk fleet does not expand by more than 2.0 percent this year.
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 Taiwan.
