Ocean rates for shipping bulk commodities, including grains, have increased since the beginning of the year due to strong coal, and iron ore imports by China. As of November 16, the ocean rate for shipping grain from the U.S. Gulf to Japan was $42.25 per metric ton (mt)—up 21% from the beginning of the year.
The rate from the Pacific Northwest (PNW) to Japan was $24.00 per mt—35% more than the beginning of the year. China imported about 19% more seaborne coal and 7% more iron ore during the first 9 and 8 months of the year, respectively (November 16, 2017 O’Neil Transportation and Export Report).
This amounts to import demand growth of 79 million tons for year-to-date cargo as compared to the same period from the previous year. Chinese iron ore imports exceeded a record 100 million tons in September for the first time. However, a projected 3% growth in fleet size and impending holidays may slow the rate of increase in freight rates during December and the early part of 2018.
