- China iron ore spot prices soften
- Buyers prefer low grade fines
Dry bulk iron ore freight rates have followed downtrend in key routes this week. In addition, fall in bunker prices have weighed on freight rates. BigMint noted that weak buying interest have pulled off enquiries, as rise in raw material prices have resulted in profitability of steel mills. Also, rise in medium grade lumps prices have influenced buyers to prefer low grade fines.
Spot prices of iron ore fines (Fe 62%) dipped by $4/tonnes (t) w-o-w to $115.05/t CFR China on 14 May because market participants are adjusting to the potential weakening fundamentals. Due to small decrease in production margins, mills are focusing towards purchase of lower quality fines that come with bigger discounts in the market.
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 fell by $0.2/t w-o-w this week to $15.3/t on 15 May, as per BigMint’s assessment.
Route wise freight specifications:
- India-China: Freight rates from the Indian Ocean to China have inched down this week. In addition, a shipbroker has booked a Supramax vessel from Paradip to Qingdao at freight rate $14-14.5/t this week. Notably, fresh enquiries are dull, as Chinese buyers are booking vessels on need basis.
- Australia-China: Australian iron ore miners have continued to fix their enquires this week. In addition, Rio Tinto, BHP and FMG are seeking tonnages for the end-May shipment at lower levels of freight at around $11.2-11.3/t. Slight decline in freight rates was recorded due to fresh fixtures in the region.
- Brazil-China: Enquiries in the Pacific region have recovered this week. However, a vessel was booked for the first week of June shipment. Trade activities are lacklustre despite lower freight rates.
- South Africa-China: Freight rates from Saldanha port to Qingdao have declined slightly this week. However, a Capesize vessel for first week of June shipment is scheduled at $17.69/t.