The bulk vessel freight rates have seen a marginal fall about 12% in current week on the ground of falling global crude oil prices.
Freight rate index for bulk vessels have declined about USD 1-2/MT with the beginning of Aug’15.The prices this month have undergone a remarkable dip after a peak climb, having touched about an 8-month high in July’15. The significant change in crude oil prices which have declined to USD 47/barrel is a main driver which is influencing vessel freight rates to go down.
In the current scenario, crude oil prices which have come down to around USD 47-48/barrel last week, is a sharp fall of about 80% from last peak prices. Currently, crude oil is traded at USD 47.32/ barrel which may decline freight prices more in near term.
Current Vessel Freight Rate
At present, the freight of shipping coal in Panamax vessel from South Africa to India is assessed at USD 9.5-11/MT, from Indonesia to India at USD 6.5-8/MT and from Australia to India assessed at USD 9/MT. Freight has fallen marginally in last one month and is currently in the range of USD 6-12/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 where the fall in vessel freights and commodity prices is good for importing countries such as India, China, Japan etc, on the other hand, this steep fall would adversely affect few counties such as Russia, heavily dependent on commodity exports.
It has been a fragile market for bulk cargo owners since last one year, also vessel freight rates have fallen to about 30-40% since 2014. Meanwhile, Q1 of FY16 rates have also declined about 28-30% compared to the same quarter of last fiscal.
However, freight rates have started strengthening since July’15 owing to limited cargo availability. At present, the bulk size cargo freight market is going downward owing to sharp fall in oil prices.
|
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 | 47.59 | 10.5 |
Source : OPEC, Coal Spot
Prices in USD/MT Panamax Vessel
Oil Prices USD/Barrel
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