- Baltic index nears 6-week lows on sluggish demand
- Chinese inquiries may be muted due to Qing Ming festival
Dry bulk iron ore freight rates have been decreasing for key routes. In addition, sluggish demand has impacted the movement of ships and declining enquiries have weighed on freight on key routes. However, Australian miners have pre-determined enquiries owing to pockets of demand. Notably, market participants from the Indian Ocean region have booked smaller vessels at lower freight rates as huge availability of vessels is seen.
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 recorded a fall of $0.77/tonne (t) this week to $13/t on 3 April, as per BigMint assessment.
Iron ore (Fe 62%) fines spot prices fell w-o-w by $2/t to $102.25/t CFR China on 2 April amid lower demand due to the upcoming Chinese Qing Ming national holiday over 4-6 April. In addition, Chinese buyers remain cautious due to the ongoing real estate crisis, resulting in decline in construction work in the country.
Route specifications:
- India-China: Freight rates from the Indian Ocean to China have been dropping this week. Limited cargo volumes and availability of too many vessels have pushed down the freight rates, a shipbroker stated. “The cargo flows have come down a bit and likewise the tonnages have started to pile up. So number seems range-bound. In fact, the overall market is coming down currently,” a shipbroker stated. However, fixtures have been seen concluded at lower freight levels.
- Australia-China: Major Australian miners BHP and Rio Tinto have booked large vessels at competitive freight rates. Meanwhile, freights on the same route have slightly declined as compared to the previous week. Absence of fresh enquiries may be witnessed in the near future.
- Brazil-China: Freight rates from the Pacific region dropped w-o-w on higher tonnage supply. The cargo volumes are healthy for the route, whereas, trading activities are sluggish as some enquiries are under negotiation on lacklustre demand in the region.
- South Africa-China: An enquiry has come in for this route amid lower rates but lack of fresh enquiries are weighing on freights.
Baltic index sinks to six week lows on sluggish demand: The Baltic Exchange’s dry bulk shipping index fell for nine consecutive days, reaching a near six-week low. This decrease reflects a decline in demand across various vessel sizes, i.e. Capesize, Panamax and Supramax. Notably, Chinese iron ore demand uncertainty amid the ongoing real estate crisis could restrict growth.
Additionally, it is expected that buying interest in iron ore may fall due to the upcoming holidays in China from 4-6 April owing to Qing Ming festival.