Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting:In this week’s Dry-Bulk freight markets, the Panamax sector stood alone and firm. All other markets slid back and continue to look weak. This begs the question: can the Panamax sector remain firm to better if everything else is softening? Physical grain rates did not really follow the Baltic Panamax index as they actually dropped slightly this week. The U.S. PNW market is gaining in freight demand. The spot and October market remains at a discount to November-December freight. The average daily earnings for capsize vessels this week was $9,875, the lowest level since August 11. Average daily earnings for Panamax vessels now stands at $7,088/day.
There are new news stories about the potential new canal through Nicaragua. I’ve not given this project any credibility in the past but I had an interesting conversation with an official from the Panama Canal Authority and they stated that they had previously given the Nicaragua project a less than 10 percent chance of happening. They now would give it a 30 percent chance, though its completion would be at least 12-15 or more years out, if at all.
See today’s news story, which opens with the following sentence: “Nicaragua’s canal will break ground in December and will be a multinational project, not an all-Chinese operation, according to a high-ranking official in Nicaragua’s government.”
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 year-to-date 2014 container shipments to Taiwan.
