Commodity Shipping Market Is Showing No Glut, Arrow’s Webb Says
Earnings for capesize vessels that sail around the Cape of Good Hope or Cape Horn to deliver cargoes dropped 49 percent this year, according to the Baltic Exchange in London. The Bloomberg Dry Ships Index of 12 commodity-shipping stocks declined 22 percent to 1,347 points over the same period.
“There’s no evidence of oversupply in the spot market,” Webb, who’s been matching cargoes with ships for three decades, said by phone today. Prices are dropping because of sentiment rather than vessel supply and demand, he said.
The fleet is set to expand three times more quickly than trade, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. The combined transportation capacity of the carriers will swell by 13 percent this year, compared with the 4 percent growth it forecasts for shipping commodities at sea.
Lower speeds increase the amount of time needed for a vessel to complete a voyage, essentially curbing ship supply.
Daily capesize rents slid 3.3 percent to $10,115 today, according to the Baltic Exchange. The Baltic Dry Index, a wider measure of commodity transportation costs, fell 1.1 percent to 1,296 points.
Panamax vessels, the largest to pass through the Panama Canal, dropped 0.4 percent to $12,232 a day, according to the bourse.
Smaller supramax and handysize carriers, both of which carry ore, coal and grains, also fell. Supramaxes lost 0.1 percent to a daily $13,223 and handysizes declined 0.7 percent to $10,112.
“Everybody believes the market is over-tonnaged full stop,” said Webb. “But the physical evidence of fixing ships is that there’s not an oversupply.”
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