Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It has been a wild ride for the Capesize sector and other dry-bulk markets. In the last 30 days spot Capesize vessel daily hire rates have gone from a high of $90,000/day down to $60,000/day. December FFA values slipped to $31,000/day. Iron ore rates from West Australia to China dropped from $22.65/MT to $12.50. Panamax and Supramax markets have had no choice but to follow these markets lower.
It looks as if market players simply got too excited too quickly in the previous rally. The question today is, have we finally hit bottom? In my opinion the market pendulum has swung too far in both directions and will likely moderate in the coming weeks. As mentioned last week, the one constant in dry-bulk markets is volatility. The current break in values should provide a good buying opportunity for charterers.
Container rates remain steady but the backlog of waiting ships off the U.S. West Coast continues to grow and logistics remain a mess.