Global bulk shipping freight rates have remained more-or-less stable this week amid marginal fluctuations on account of slowing market demand and economic slowdown in major countries dealing in bulk vessels for commodity trading.
Bulk vessel freight rates have exhibited stability in the range of USD 6-12/MT during the last couple of weeks, after a downward trend a month ago. The bulk shipping market recorded a decline of approximately 47% during FY16, undergoing fluctuations.
Crude oil prices, a core driver in influencing movement of vessel freight rates, have continued to remain low, and was reported at USD 44.48/ barrel on 24 Sept’15. Also, bearish outlook for bulk commodities and constant fall in prices 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 | 44.48 | 10 |
Source: OPEC, Coal Spot
Prices in USD/MT Panamax Vessel
Oil Prices USD/Barrel
Current Freight Rates
Currently, shipping freight for coal in bulk vessels of all sizes from South Africa to India are assessed at USD 8-12/MT.
1. Supramax- USD 11-12/MT
2. Panamax- USD 10-11/MT
3. Capesize- USD 8-9/MT
Freight rates from Indonesia to India are within USD 6-9/MT.
1. Supramax- USD 8-9/MT
2. Panamax-USD 6-7/MT
3. Capesize-USD 5.50-6.50/MT
Freight rates from Australia to India are in the range of USD 8-14/MT.
1. Supramax- USD 13-14/MT
2. Panamax-USD 10.15-11/MT
2. Capesize- USD 8-9/MT
The fall in vessel freight rates is beneficial for importing countries, like India, China, Japan etc. But, disadvantageous for export dependent countries, 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 possibly take longer, being ruined by heavy supply and slow global demand. But on the brighter side, stability in current market is reflecting a positive hope that rates are likely to recover by the end of this year.
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