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发表于 2010-7-12 09:31 PM
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Baltic Dry Index Down, Container Freight Rates Up, What’s Going On?
by stuart on July 6, 2010
Although it is not unheard of, it is a little bizarre that freight rates for bulk cargoes have been on a yearlong downward trend while container rates are rising strongly. True they cater to different sectors of the market, the first to raw materials like iron ore, coal and agricultural products, whereas the container market is more sensitive to semi or finished goods but shipping rates in general are often taken as a measure of the global economy so what’s going on?
Dry bulk rates rebounded from record lows seen in late 2008 at the height of the economic crisis. Average earnings at that time for the larger capsize vessels plummeted to just over US$2,000 per day according to a Reuters article. Last week, those same size vessels were earning over US$24,000 a day but the peak was reached last year (since then the rates have declined). The Baltic Dry Freight Index illustrates the point well. In May of 2008, BDI hit its record high ever, 11,700 points. From there it began its steep fall starting in mid-July. By Dec.5, 2008 it had slumped to 663 pts, a record low. But by November, 2009 the BDI had recovered to 4661 pts. As of July 1 this year, the Baltic Dry Freight Index had settled to 2351 pts, 55 down from June 30. So what caused the collapse over a period in which all we have heard is the strength of China’s growth and the country sucking in raw materials? Well the reason the BDI is taken as such a bell-weather of the global economy is because it reflects rates being paid for cargoes shipped. There are fears that demand in China is showing early signs of cooling and mills, well stocked with raw material, are slowing purchases reducing the demand for imports. Coal and iron ore alone make up 54% of all dry goods shipped and China is the largest seaborne trade destination so the country is crucial in driving the Index. At the same time, like the super tankers they run the shipping industry has a backlog of new vessels commissioned years ago which have been coming off the slipways and into service just as the recovery appears to falter. The resulting over capacity was described in a Business Week article as freight demand increasing by the equivalent of 634 vessels this year while supply has expanded by 1,110 ships. What we are seeing is an over supply of shipping space rather than a dramatically slowing global economy.
The container market on the other hand is going in the other direction. The major Taiwanese shipping line Evergreen Marine Corp. said late last week it is raising its shipping rates on its European routes and will add surcharges during the current peak season amid strong demand. Announcing rate increases on its Europe-Mediterranean westward routes from July 1 of US$250 per twenty-foot equivalent unit (TEU), and a peak season surcharge of US$300 per TEU with effect from July 18. The shipping line is taking a bullish tone explaining the increases on strong demand for container space but Nils Smedegaard Andersen the chief executive of A.P. Moeller-Maersk is quoted in a Reuters article as saying the increase in container freight rates is the result of a shortage of shipping containers, not a booming global economy. The level of demand and the availability of space are absolutely two distinct matters he said. During the last 19 months, container shipping companies didn’t order any containers. “Now the economy has picked up and that leaves us with a shortage of the containers. We hope at best for a slow recovery. We are not optimistic.”
So all is not as it first seems. Bulk cargo rates are falling more because of vessel supply than a sharp decline in trade while container traffic rates are rising more because of a shortage of containers than a booming finished goods market. Not surprisingly the recovery continues to be a rocky road even if so far it appears to be heading more or less in the right direction.
–Stuart Burns |
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狗仔卡
发表于 2010-7-12 09:21 PM
