Ocean Freight Comments
Transportation and Export Report: Jay O’Neil, O’Neil Commodity Consulting: It was a fairly quiet week in Dry-Bulk markets and rates struggled to inch higher with spot prices at a discount to deferred positions.
Dry-Bulk markets find themselves in a bit of a quandary. The cost of IMO2020 compliance is starting to hit home but market traders seem to be more focused on the negative impact of global microeconomics and the imbalance of the fundamental supply and demand picture. So, there are two strong but opposite forces pulling on freight markets. This will certainly add volatility and create rate pain for all concerned. There will certainly be tightness in vessel availability in some regions as vessels are pulled out of service and retrofitted to satisfy IMO compliance. But, in the long run, it is difficult to think that daily hire rates can maintain their heights if the global economic outlook does not improve.
