Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting:It is a very mixed bag for this week’s dry-bulk ocean freight markets. The Capesize market is relatively steady with iron ore raters from Western Australia still trading in the low $9.00/MT range. The Supramax and Handymax markets remain firm, but the Panamax market continues to struggle. The Baltic Panamax index (BPI) was down 3 percent last week and is down another 8 percent this week. You have to go back to September 19 to find a BPI at a similar level.
The Christmas market rally anticipated by vessel owners certainly has not yet materialized. The weakness in the Pacific is widening the U.S. Gulf/PNW freight spread and pushing more grain business to the U.S. West Coast. Canadian West Coast grain facilities have seen record vessel backups and loading delays.
The current wait for ships to transit the Panama Canal is about five days. Approximately 15 ships are transiting each way while an estimated 35-40 ships are lined up daily to transit from each direction. There are 7 open booking slots available every day and each slot is being auctioned at the $100,000+ level, all of which are taken mostly by tankers.
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 2011 and January-December 2012 annual totals versus January-September 2013 year-to-date container shipments for Philippines.
