Freight charges for Capesize carriers shipping iron ore from Brazil and Australia to China had gradually eased to a one-month low as of July 21 amid the softening of demand for this size of carrier, according to market sources on Wednesday.
As of July 21, the freight charge between Dampier in Western Australia and China’s Qingdao port stood at $6.94/tonne, dipping by another $1.35/t or 16% on week. Similarly, freight between Brazil’s Tubarao and Qingdao also decreased to $17.49/tonne as of Tuesday, lower by $1.15/t or 6% on week.
Prior to this, freight rates for these two ship routes had steadily climbed since mid-May to reach new highs as of July 6 before losing ground soon after, Mysteel Global notes.
“The decline in freight rates for Capesize carriers we’re seeing now is largely a result of the major iron ore miners in Australia and Brazil slowing their pace of shipping iron ore tonnages,” a Shanghai-based analyst commented.
Mysteel’s survey also showed the same trend, with the total volume of iron ore dispatched to global destinations from the 19 ports and 16 mining companies in Australia and Brazil reaching 47.5 million tonnes in the two weeks over July 6-19, down by 13% from the previous two weeks.
According to the analyst, bids for Capesize carriers for iron ore shipments in both the Pacific and Atlantic markets were limited over the past few days. Consequently, shipowners were not aggressive in defending their offering prices.
Nevertheless, for now the lower freight charges have not dragged down iron ore prices, Mysteel Global observed.
As of July 21, Mysteel’s SEADEX 62% Fe Australian Fines price, for example, stood at $111.1/dmt, up $9.7/dmt from the price on July 6. As of the same day, Mysteel’s SEADEX 65% Fe Brazilian Fines also gained $6.9/dmt from July 6 to reach $121.9/dmt. Both are in terms of CFR Qingdao, East China’s Shandong province.
Capesize dry bulk carriers, usually at 100,000 deadweight tonnes and above, are chiefly engaged in shipping iron ore from Australia, Brazil, and South Africa, to destinations such as China, Mysteel Global notes.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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