1996: What Goes Up Must Come Down

by Richard Harris, Maxwell Harris Company Inc.

From an owner’s perspective, 1996 began with great promise. The Chinese were in the midst of a grain buying spree. The benchmark 54000 long tons HSS Gulf/Japan was USD 28.00 per long ton. And the freight market was coming off record highs in 1995. However, as the year progressed, owners soon realized that 1996 would be a huge disappointment.

Not only did the Chinese stop importing corn, but they canceled wheat purchases made earlier in the year. Coal shipments slowed as end users drew down on stocks. North American grain prices rose dramatically and choked off summer demand for grain. Handymax, Panamax and Capesize newbuildings continued to be delivered onto the market at a steady pace. The rate of scrapping early 1970s built vessels was slow. Scrap prices fell and owners reluctantly started to use the ugly word.

This is only an excerpt of 1996: What Goes Up Must Come Down

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