- Strengthening China demand boosts vessel movements
- Many enquiries fixed ahead of China’s Labour Day holidays
Dry bulk iron ore freight rates moved upward this week on rising demand from China. Demand for steel from the manufacturing and infrastructure sectors in China has been supporting iron ore import volumes. Additionally, major iron ore miners have recorded an increase in iron ore production in the first quarter of the current fiscal year.
Factors affecting freight rates:
- Impact of Iran-Israel war: Insurance premium and freight rates for global routes rose by $0.50-1/t due to the ongoing geopolitical fissure involving Iran and Israel. However, it is expected that freight rates will edge down gradually.
- Iron ore shipments are scheduled for May arrival cargoes in preparation for China’s Labour Day holidays starting 28 April.
- Iron ore (Fe 62%) fines spot prices inched up w-o-w by $4/t to $114/t CFR China, and the portside margin remained supported this week. Seaborne purchases were more favourable than portside deals due to positive import margins, resulting in higher transaction volumes. Meanwhile, demand for steel from infrastructure and manufacturing is expected to rise gradually.
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 inched up by $1/t w-o-w this week at $14.5/t on 24 April, as per BigMint assessment.
Route specifications:
- India-China: Freight rates from the Indian Ocean to China have recorded a growth on rising in traffic at ports driven by iron ore export activities. Increasing demand from China have pushed iron ore shipments higher resulting in higher freight rates for the key route, sources informed.
- Australia-China: Australian iron ore miner Rio Tinto has booked a capesize vessel which has kept freight rates supported. The shipment is scheduled for May post China’s Labour Day holidays.
- Brazil-China: Trading activities from the Pacific region have bolstered freight rates. Notably, Brazilian miner Vale has increased its iron ore production by 6% y-o-y, which has kept export trades supported. Some fresh enquiries for the key route are under negotiations for mid-May shipment.
- South Africa-China: Iron ore shipments have received a boost this week. An enquiry from Anglo American has been fixed this week for mid-May shipment.
