Study On Forecasting Iron Ore Freight Rates Based On Wavelet Analysis

Dry-bulk shipping market has the largest risk and the most violent fluctuation in the international shipping market. The iron ore shipping market is one vital part of international dry bulk freight market. During recent years, the iron ore freight rate remained sharp fluctuations and gets out of trend for being influenced by many factors which bring huge risk and opportunity for operators in market. Just going on that point, the thesis combines qualitative and quantitative analysis, mainly adopts wavelet analysis and ARMA model to search for inherent laws of freight rate and forecasting effectively.Chapter one mainly making a brief introduction of this research background and research purpose, pointing out the principle of studying framework, reviewing the main theory and method on dry bulk shipping market, and then raising the purpose of this study. Chapter two describes recent dry bulk shipping market, and then analyzes international dry bulk shipping market in depth from the angle of iron ore market supply and demand, discussing the factors that would have influence on market supply and demand. Chapter three mainly making a history introduction of wavelet analysis, MRA, and data de-noise. wavelet analysis has the great superiority in iron ore freight rate data process and the choice of function. Chapter four describe main current forecasting methods and ARMA model, and forecasting future 40 days freight rate, and compare with he results without wavelet analysis Wavelet analysis is adopted to de-noise freight rate and get rid of noise, so ARMA model will simulate and forecast better. Chapter five is the summary and prospect of the thesis. It summarizes the total contend and puts forward shortcoming of the thesis.From the forecasted results, this thought can realize better to grasp the development trend of iron ore freight rate compare with the results only forecasted by ARMA model not de-noising. The conclusion is that the former can hold the rate's inherent laws better, and error rate is also lower. This study will be relevant participants in the iron ore industry service providers and transport operators to provide useful decision-making and improving the profitability of enterprises and competitiveness.