Ocean Freight Comments
Ocean freight markets continued trending lower this week, but can you guess why?
Golden Destiny stated that “During the first four months of 2014, the average number of weekly reported new orders was 69, up by 86 percent year-on-year (37 new orders on average reported per week in January-April 2013) and up by 165 percent from 2012 levels. (26 new orders on average reported per week in January-April 2012)”
It has been reported that ship owners/investors have plunked down $40 billion in new building across the entire shipping sector in the first four months of 2014. If market players don’t learn from their past mistakes they will inevitably relive them. Or as the original George Santayana quote read, “Those who cannot remember the past are condemned to repeat it.” However you wish to state it, I hope shipping investors and their banks get the message. Daily hire rates for Capesize Bulk vessels is down to $10,900/day and Dry-Bulk Panamax vessels are at $7,200/day for long voyages, while short 20-day voyages can go for as low as $4,000/day.
I see about 12 Brazilian soybean vessels either at U.S. ports or on their way to U.S. ports. They are set to unload in all regions: the U.S. Gulf, West Coast California, East Coast and even the Great Lakes. It looks like all of our year end soybean carryout stocks will be from Brazilian beans?
In 2013 China accounted for 200 MMT of new cargo demand or 83 percent of world dry-bulk freight growth.
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 annual totals versus January-February 2014 container shipments for Taiwan.
