Stability in global bulk shipping freight rates continued to prevail this week primarily due to slowing market demand and economic slowdown in the major countries dealing in bulk vessels for commodity trading.
Notably, bulk shipping freight rates have continued to remain steady at around USD 6-13/MT during the last couple of weeks, after recovering from a downturn a month ago. During FY16, the bulk shipping market has recorded a decline of 47% on account of slowdown in major global economies.
Prices of crude oil, a crucial influencer of vessel freight rates, have continued to remain low and was reported at USD 44.66/barrel as on 1 Oct’15. Also, bearish outlook for commodity prices 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 |
| Sept’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 |
| Sept’15 | 44.48 | 10 |
| Oct’15 | 44.66 | 9.5 |
Source: OPEC, Coal Spot
Prices in USD/MT Panamax Vessel
Oil Prices USD/Barrel
Current Freight Rates
Currently, freight rates for coal in bulk vessels of all sizes from South Africa to India are assessed at around USD 8.50-12/MT.
1. Supramax- USD 11-12/MT
2.Panamax- USD 10-11/MT
3. Capesize- USD 8.50-9/MT
Freight rates from Indonesia to India are within USD 6-10/MT
1. Supramax- USD 9-10/MT
2.Panamax-USD 6-7/MT
2. Capesize- USD 6-7/MT
Freight rates from Australia to India are at around USD 9.50-13/MT
1. Supramax- USD 12-13/MT
2.Panamax-USD 10-11/MT
3. Capesize-USD 9.50-10.50/MT
Freight rates from Australia to China are at around USD 6.5-9/MT
1.Panamax-USD 8-9MT
2. Capesize-USD 6.5-7 /MT
Apparently, the freight price fall is beneficial for import dependent 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 limited cargo availability strengthened the rates marginally in July’15. Market expectations are pessimistic of any recovery in bulk freight rates in the medium to long term as slow global demand and heavy supply are expected to continue dominating. On the brighter side, the stability in current market also reflects an optimistic hope of some recovery in the rates by this year end.
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