Economy
Freight Update for November
Written by Sandy Williams
November 23, 2013
Shipping markets in the Gulf are seeing some strong rates as producers are anxious to fix and load cargoes before the holidays and year end according to the November 20th MID-SHIP Report.
Shipping rates in the The Cape and Panamax markets have eased in the past two weeks but Chinese steel mill restocking of iron ore for the winter months may push cape rates up. In the Panamax market rates dropped 15 percent with Pacific Ocean charters dropping below $10,000 per day. Forward Freight Agreements for the first quarter of 2013 are below $10,000 indicating a possible slow recovery.
Coking coal from Australia freight rates jumped ten percent in the voyage charter market in the Pacific but is not expected to be sustainable. Coking coal prices have been on a decline but were fairly steady last week and may be near the bottom. Chinese demand has been weak and current inventories are expected to last through January. Quarterly negotiations for first quarter 2014 are set to begin within the next few weeks which will give a better idea of future shipping demand.
Rates in the Supramax Market rose in the past two weeks. Average time charters are up in the US Gulf to $14,331 and US Gulf to Continent to $25,731. Roundtrip NOPAC voyages in the Pacific rose to $12,269.
In the Handysize Market in the last two weeks Trans Atlantic Voyages rose 10 percent to $9,794 and TransPacific Round Voyages rose 5 percent to $8,781. The average of the four time charter routes on November 20 was $10,071.
Barge and Truck Freight
Grain shipments continue to keep barges busy and could extend the trading season well into December. The lengthened season is due to the large harvest, strong export demand, and weather delays such as the recent strong storm systems in the Midwest. Coal export shipments from the Big Sandy River were delayed by a landslide on November 18 that is expected to take a week to clean up. The Illinois River will have long delays due to maintenance on the Marseilles Lock that will affect barges moving up to Lemont, Chicago and Burns Harbor.
The American Trucking Association says the new hours of service rules have created problems for drivers and fleets, cutting into both productivity and pay. ATA President Bill Graves said, “The ATA was confident the hours of service rules were based on politics, not data.”
Diesel fuel prices fell for the fifth consecutive week, down to 3.822/gallon. Fuel surcharges are expected to be in the range of $.58 – $.60 per one way mile.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
US housing starts gain momentum in July
US housing starts rose in July both month-on-month and year-on-year, according to figures from the US Census Bureau.
Manufacturing in New York state improves again in August
Business activity in New York state improved modestly in August. It was just the second positive reading for the general business conditions index in six months.
President Trump intends to set additional steel tariffs
While boarding Airforce One on Friday, US President Donald Trump stated that he would be setting more steel tariffs and putting ~100% tariffs on semiconductors and chips.
Hot-rolled spot market conditions linger, prices slip
Market participants said they have high hopes that the stable hot-rolled spot market will improve as the year rolls on.
Dodge Momentum Index surges in July
The Dodge Momentum Index (DMI) jumped 20.8% in July and is now up 27% year-to-date, according to the latest data released by Dodge Construction Network.