Shipping freight rates haven’t changed this week as demand conditions did not undergo any notable shift.
Bulk shipping freight rates have remained almost stable as in the preceding week. Persisting low demand and economic slowdown in the major countries dealing in bulk vessels for commodity trading are the prime factors of stability in freight rates.
Subsequent to downturn nearly two months ago, bulk shipping freight rates underwent a moderate recovery. The rates continued to remain almost flat, at around USD 6-13/MT. Notably, the bulk shipping market recorded a downfall of 47% during FY16 on account of slowdown in global economies.
Crude oil prices, a crucial influencer of vessel freight rates, underwent a slight increment this week, and was reported at USD 48.10/barrel on 8 Oct’15. Moreover, the freight market has been hit by bearish outlook for commodity prices, and constant fall in prices.
Crude oil prices with vessel freight rates
| Month | Crude Oil Prices | Vessel Freight, Indonesia to India |
| Jul’14 | 105.61 | 9 |
| Aug’14 | 100.75 | 8.5 |
| Sep-14 | 95.98 | 9.1 |
| Oct’14 | 85.06 | 8.7 |
| Nov’14 | 75.57 | 9.9 |
| Dec’14 | 59.46 | 8.6 |
| Jan’15 | 44.38 | 5.5 |
| Feb’15 | 54.06 | 6 |
| Mar’15 | 52.46 | 6.7 |
| Apr’15 | 57.3 | 6.5 |
| May’15 | 62.16 | 6.1 |
| Jun’15 | 60.21 | 7.2 |
| Jul’15 | 54.19 | 7.1 |
| Aug’15 | 45.46 | 6.3 |
| Sept’15 | 44.48 | 6.3 |
| Oct’14 | 48.1 | 6 |
Prices in USD/MT Panamax Vessel
Oil prices in USD/Barrel
Source: OPEC, Coal Spot
Current freight rates
Currently, freight rates for coal in bulk vessels of all sizes from South Africa to India are assessed at around USD 9-12/MT.
1. Supramax – USD 11-12/MT
2. Panamax – USD 10-11/MT
3. Capesize – USD 9-10/MT
Freight rates from Indonesia to India are in the range of USD 6-8/MT.
1. Supramax – USD 7-8/MT
2. Panamax – USD 6-7/MT
3. Capesize – USD 6.50-7.50/MT
Freight rates from Australia to India are within 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
Fall in freight rates is apparently beneficial for import dependent countries, like India, China, Japan etc. But disadvantageous for export dependent countries, like Russia, Indonesia, Australia, South Africa etc.
Dry bulk freight rates dropped sharply during the 1st six months of 2015, but the rates improved marginally in Jul’15 owing to limited cargo availability. Dominance of slowdown in global demand and heavy supply has ruled out the prospect of any recovery in bulk freight rates in the medium to long term. However, stability in current market may lead to some recovery in freight rates by year end.
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