SteelMint

Dry bulk iron ore freights dip w-o-w amid higher vessel availability

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by

Nikita Shukla
in
  • Chinese demand raises iron ore spot prices
  • Upturn seen in inquiries for super special fines

Dry bulk iron ore freight rates softened slightly this week for key routes. Availability of vessels in global markets has improved, pulling down freight rates. Meanwhile, iron ore demand from China has remained strong because of an expected increase in steel demand amid government stimulus measures. In addition, buyers have booked vessels at lower freight rates, resulting in increased enquiries.

Spot prices of iron ore fines (Fe 62%) edged up by $6/tonne (t) w-o-w to $121/t CFR China on 22 May. Despite the lack of movement, the market was positively affected by recent Chinese policy changes and expectations of heightened demand for steel. As per reports, market sentiment remains positive for the near future, which is offering additional support for ongoing iron ore prices. Furthermore, there is an upturn in inquiries for super special fines due to its advantageous production margins.

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 down by $0.3/t this week to $15/t on 22 May, as per BigMint’s assessment.

Route-wise freight specifications:

  • India-China: Freight rates from the Indian Ocean to China have edged down this week. In addition, a Supramax vessel of iron ore is seen booked from the east coast region to China at $15/t, sources informed BigMint.
  • Australia-China: Australian iron ore miners Rio Tinto and BHP were seeking tonnages for June shipments at lower levels of $10.2-10.6/t. Some enquiries are still under negotiations.
  • Brazil-China: Enquiries in the Pacific region have increased this week. However, a vessel was booked for the Brazil-to-Europe route for the first week of June. Notably, the Atlantic region was off due to holidays in Switzerland. Trade activities were dull this week.
  • South Africa-China: Freight rates from Saldanha Port to Qingdao have dropped this week. However, an enquiry for a Capesize vessel for mid-June shipment is under negotiation.