Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: I guess the big questions at the moment are: How low can things go? How much worse can things get for vessel owners?
Market dynamics remain soft and buyers have the upper hand. I did read a freight news story that quoted an international freight consultant saying Capesize rates would rise to $25,000/day, but I don’t know what tea leaves that individual was reading. The general news out of China continues to disappoint with each new economic forecast dropping a little from the previous one. I’m not real bearish but I certainly I don’t see anything bullish on the horizon. As far as rates go, it appears that I’ve been erring on the side of caution regarding rates over the last few weeks. As I look at this week’s market activity things are lower than the Baltic Indices would indicate. Of course, the physical market does not often follow the Baltic point for point. I’m therefore adjusting rates in this report.
Below is a recent history of freight values for Capesize vessels of iron ore from Western Australia to China:
The charts below represent year-to-date 2015 versus January-December 2014 annual totals for container shipments to China.
