Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It was another week of up markets. Looking back, the Baltic Dry-Bulk Indices have, for the most part, been moving up for the last 16 days. This looks impressive and has been fueled mostly by improved iron ore and coal business as well as increased grain exports from the U.S.
Physical rates in the grain trade are slightly higher but have not mirrored the percentage increases of the Baltic Exchange. We’ll have to wait to see if this is just a matter of lag-time or a case of some overly excited (read overly optimistic) players in the Baltic Exchange. Atlantic and Pacific Dry-Bulk indices are now back up to levels not seen since late March 2014. It is curious to note that Physical Panamax rates from the U.S. and South America to Asia in late March were $3.00-$4.00/MT higher than they are today at nearly the same index levels. Considerably cheaper bunker fuel rates must have something to do with that.
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 Hong Kong.
