Prevalence of low demand has kept bulk shipping freight rates almost stable this week.
Rates of all types of vessels have remained in the range of USD 6-12/MT. Low demand for commodities has been prevailing primarily due to weak global economies, leading to slight sustainability in shipping freight market.
As a matter of fact, bulk shipping freight rates have exhibited an almost flat trend, after a moderate recovery from a downfall of 47% two months ago; arising on account of global economic slowdown.
Crude oil prices, a decisive parameter in influencing shipping freight rates, continued to remain low and was reported at USD 43.44/barrel on 22 Oct’15. Besides, excess vessel capacity and intense competition among shipping companies have also contributed considerably to the lackluster freight market.
Crude oil prices vs. vessel freight rates
| Month | Crude Oil Prices | Vessel Freight, South Africa to India |
| Jul’14 | 105.61 | 13.5 |
| Aug’14 | 100.75 | 13.2 |
| Sep’14 | 95.98 | 15.4 |
| Oct’14 | 85.06 | 13.2 |
| Nov’14 | 75.57 | 14.3 |
| Dec’14 | 59.46 | 11.4 |
| Jan’15 | 44.38 | 8.5 |
| Feb’15 | 54.06 | 9.1 |
| Mar’15 | 52.46 | 8.7 |
| Apr’15 | 57.3 | 9.2 |
| May’15 | 62.16 | 9.6 |
| Jun’15 | 60.21 | 9.1 |
| Jul’15 | 54.19 | 9.9 |
| Aug’15 | 45.46 | 9.8 |
| Sept’15 | 44.48 | 8.8 |
| Oct’14 | 43.44 | 8.6 |
Panamax Vessel prices in USD/MT
Oil prices in USD/barrel
Source: OPEC, Coalspot
Dominance of global economic slowdown has apparently ruled out any improvement in shipping freight rates in near to medium term. On the other side, there is a possibility of capesize freight rates undergoing slight increment in near term as coal stockpiling will begin in the Asian region with onset of winter.
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