Global dry bulk vessel freights are moreover stable in this week on grounds of slowing demand in market, coupled with slow economic growth in major countries that deals in bulk vessels for commodity exchange.
The bulk vessel freight rates, which were in a downtrend a month ago, have been reflecting stability at USD 5-12/MT (for all size of bulk vessels) from last couple of weeks. The bulk shipping market has experienced fluctuations in FY16: and registered a decline by 47% compared to the last year.
Crude oil prices which declined to their lowest, i.e. USD 40/barrel, in last month is a core driver which is influencing vessel freight rates to go down. Also, bearish outlook of dry bulk commodities and their constant fall have hit the freight market.
| Month | Crude Oil Price | Vessel Freight, South Africa to India |
| Jul-14 | 105.61 | 15 |
| Aug-14 | 100.75 | 15.5 |
| Sep-14 | 95.98 | 15.8 |
| Oct-14 | 85.06 | 15.6 |
| Nov-14 | 75.57 | 16 |
| Dec-14 | 59.46 | 12.5 |
| Jan-15 | 44.38 | 9 |
| Feb-15 | 54.06 | 9.5 |
| Mar-15 | 52.46 | 10.5 |
| Apr-15 | 57.3 | 9.5 |
| May-15 | 62.16 | 10 |
| Jun-15 | 60.21 | 10.4 |
| Jul-15 | 54.19 | 11.5 |
| Aug-15 | 45.46 | 10.5 |
| Sep-15 | 47.5 | 10.5 |
Source: OPEC, Coal Spot
Prices in USD/MT Panamax Vessel
Oil Prices USD/Barrel
Current Vessel Freight Rate
At present, the freight of shipping coal in all size of bulk vessels from South Africa to India is assessed at USD 6.5-12/MT.
- Supramax – USD 11-12/MT
- Panamax – USD 9.5-10.5/MT
- Capesize – USD 6.5-8/MT
Freight rates from Indonesia to India are in the range of USD 4.5-10/MT.
- Supramax – USD 8-11/MT
- Panamax – USD 6-7.5/MT
- Capesize – USD 4.5-5.5/MT
The freight of shipping coal in Panamax vessel from Australia to India is assessed at USD 9-9.5/MT. Freight has been more or less stable from last few weeks and is currently in the range of USD 4.5-12/MT for all size of bulk vessels.
Be it coal, iron ore, steel, copper or other commodity shipped in bulk cargoes, the sudden fall in prices is quite apparent.
On one hand the fall in vessel freights and coal prices is good for importing countries such as India, China, Japan etc. On the other hand, this steep fall would adversely affect few countries dependent on exports such as Russia, Indonesia, Australia, South Africa etc.
Dry bulk freight rates dropped sharply in the first six months of this year, but strengthened marginally in July’15 owing to limited cargo availability. Market expectations are that bulk freight recovery will take longer, being ruined by heavy supply and slow global demand. But stability in current market is reflecting a positive hope that rates will be recovered till the end of the year.
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