Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: The Capesize market found solid support from increased Chinese iron ore and coal demand and staged a significant rally. The increase in Chinese imports is attributed to the impact of recent government stimulus programs. The Panamax vessel sector experienced an increase in global port congestion and followed the Capesize sector upward for the week. Vessel owners in dry-bulk markets believe a market bottom has been established and things are now poised to move higher in the coming months and year. Time will tell if this is just an early Christmas gift or a true market turnaround.
Rates are also being impacted by the low water situation at the Panama Canal and the subsequent reduction in vessel transits and higher cost of passage. Most grain ships moving from the U.S. Gulf to Asia are now avoiding the Panama Canal and re-routing via the Suez Canal. This obviously adds 8-9 extra tonne-days and costs to the voyage. For grain shipments from the U.S. Gulf to Asia; there is no Panama Canal for the next few months.
