Olympics Lower Freight Rates
Early stockpiling will lead to drop in demand.
Compiled by staff
Published: Aug 15, 2008
Now that the Olympics are underway, global freight costs are down significantly. According to a report in the Economic Times, the flurry of ships needed before the games will now slow down. For instance, China had been stockpiling diesel and crude oil ahead of the games to ensure uninterrupted supplies. The demand for tankers is expected to drop 40%, Economic Times reports.
And to keep air quality cleaner, Chinese factories were shut down and did not need the huge volumes of raw materials brought in, or the ship-loads of finished goods to move out. China is also forecasting a record soybean crop, which will cut down the need to ship soybeans from South America or the U.S. China's huge appetite for metals and ores is also simmering as the "state-sponsored construction boom is over, at least for now," the paper reports.
"Panamaxes that were ruling at $66,000/day at July-end are now at $58,000. The average August-September rates are $60,000. For the fourth quarter, the average rate is $66,000. But it is rapidly falling. For the first quarter of next year, rates are ruling at $62,000 and for second quarter at $60,000. Industry watchers say freight rates are tumbling also because of the general correction in global commodity prices. Since the heat has cooled down substantially, freight is following suit," Economic Times reports.
Source: Feedstuffs
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Tagged: soybeans, soybean, soybean crop
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