- Chinese steel mills return post Labour Day holidays
- Rise in bunker prices, vessel shortage boost freights
Dry bulk iron ore freight rates have risen this week for the key routes amid improved demand from China. Movement of Capesize vessels have benefitted from strong Chinese iron ore import demand, pushing freight rates higher this week.
BigMint notes that demand in the infrastructure sector in China is recovering post Labour Day holidays and steel mills are procuring raw materials. Also, increase in bunker prices and shortage of vessels, with increased movement of grains, have contributed to the uptrend in vessel rates in the Indian ocean.
Asia-Pacific Supramax dry bulk (50,000-55,000 t) freight rates for an iron ore vessel from the east coast of India to China rose by $0.5/tonne (t) w-o-w this week to $15.5/t on 8 May, as per BigMint’s assessment.
Spot prices of iron ore fines (Fe 62%) hiked by $2/t w-o-w to $119/t CFR China on 8 May. The increase in global spot prices is owing to inquiries from mills and traders post holidays to recover the import losses.
Route wise freight specifications:
- India-China: Freight rates from the Indian Ocean to China have increased this week. In addition, a shipbroker has booked a Supramax vessel from Paradip to Qingdao at freight rate $15-16/t this week. Meanwhile, some enquiries are recorded, but still they are under negotiation.
- Australia-China: Australian iron ore miners are aggressively booking tonnages this week. Moreover, Rio Tinto, BHP and FMG are seeking tonnages for the end-May dates at freight levels of around $11.4-11.6/t.
- Brazil-China: Enquiries from the Pacific region are under negotiation as some charterers are preferring loading dates from end-May to June. This has increased the freight levels as a few charterers are seeking tonnages for June laycan.
- South Africa-China: Iron ore shipment activities were flat this week. However, Assmang Ore has fixed a Capesize vessel for 19-23 May shipment at a higher freight level.