Bulk freight rates have remained stable this week as demand continued to remain low.
Bulk shipping freight rates have not undergone any major change this week as a consequence of low demand and economic slowdown in the major countries dealing in bulk vessels for commodity trading.
After a downturn nearly two months ago, bulk shipping freight rates underwent a moderate recovery, and continued to remain flat at around USD 6-13/MT. The bulk shipping market recorded a downfall of 47% in FY16 on account of slowdown in major global economies.
Crude Oil prices, a crucial influencer of vessel freight rates, continued to remain low, and was reported at USD 45.05/barrel, as on 15 Oct’15. Moreover, the freight market has been hit by bearish outlook and constant fall in prices.
Crude oil prices with vessel freight rates
| Month | Crude Oil Prices | Vessel Freight, Australia to India |
| Jul’14 | 105.61 | 13.9 |
| Aug’14 | 100.75 | 14.2 |
| Sep’14 | 95.98 | 15.3 |
| Oct’14 | 85.06 | 15.1 |
| Nov’14 | 75.57 | 17 |
| Dec’14 | 59.46 | 11.5 |
| Jan’15 | 44.38 | 9.3 |
| Feb’15 | 54.06 | 10.3 |
| Mar’15 | 52.46 | 10.2 |
| Apr’15 | 57.3 | 9.9 |
| May’15 | 62.16 | 10.2 |
| Jun’15 | 60.21 | 10.7 |
| Jul’15 | 54.19 | 10.5 |
| Aug’15 | 45.46 | 9.5 |
| Sept’15 | 44.48 | 8.9 |
| Oct’14 | 48.1 | 9.5 |
Panamax Vessel prices in USD/MT
Oil prices in USD/barrel
Source: OPEC, Coalspot
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 8-9/MT
Freight rates from Indonesia to India are in the range of USD 6-10/MT.
1. Supramax-USD 9-10/MT
2.Panamax-USD 7-8/MT
3.Capesize-USD 6-7/MT
Freight rates from Australia to India are within USD 9-13/MT.
1.Supramax-USD 12-13/MT
2.Panamax-USD 11-12/MT
3.Capesize-USD 9-10/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 rates improved marginally in Jul’15 owing to limited cargo availability. Dominance of slowdown in global demand and heavy supply have ruled out the prospect of any recovery in bulk freight rates during medium to long term. However, stability in current market may lead to some recovery in freight rates by year-end.
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