Freight Rates: Holy Ship Captain

Wednesday 15 Sep 2021

 
Ocean freight costs have soared - Demurrage costs at ports in New Zealand and China add to the high daily costs of vessels. The reduction of logs vessels from New Zealand in September will do little to ease the market as logs account for less than 10% of the total handy size trade. The Baltic Dry Index was sitting at 1200 in November and is now at 4235. High ocean freight costs are the biggest impediment to improving AWG prices through quarter 4 in New Zealand.

The Baltic Dry Index (BDI) is a composite of three sub-indices, each covering a different carrier size: Capesize (40%), Panamax (30%), and Supramax (30%). It displays an index of the daily USD hire rates across 20 ocean shipping routes. Whilst most of the NZ log trade is shipped in handy size vessels, this segment is strongly influenced by the BDI. The Singapore Bunker Price has continued to edge upward.

Source: PF Olsen Wood Matters

Graph Source: TradingEconomics.com



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