Derivatives in the freight market

摘要

International dry bulk freight rates have always been highly volatile within certain parameters that were largely understood. Whilst there has always been a reasonably steady annual demand for some of the major trades, there was also a smaller percentage of spot demand in others that could distort the market, albeit temporarily. These elements of volatility were supported by many other factors including intangible influences such as sentiment but, more importantly, the decisions taken by owners and operators on when to build more ships and/or keep older vessels operating. Often this resulted in more ships being delivered to the market at a time when freight rates may well have passed their peak.