Shipping freight rates have remained unmoved in the absence of any demand upside.
However, a temporary demand improvement in China for iron ore has inflicted a thin ray of hope among shipping players to see some possible improvement in freight rates in the near future.
Demand for iron ore has recently improved in China as consumption of steel has increased due to the construction industry picking up in that country. However, coal demand has not undergone any improvement.
The overall demand is, however, sluggish with vessels outnumbering cargoes. The sluggish demand has arisen from the economic slowdown prevailing in China that retarded committee trading globally. China is the largest importer of many commodities, including iron ore and coal.
Current freight rates (coal cargoes)
| Route | Supramax | Panamax | Capesize |
| Australia to India | 11.5 | 7.5 | 5.5 |
| South Africa to India | 9 | 7 | 5 |
| Indonesia to India | 6.5 | 5 | 4 |
Freights in USD/MT
Source: SteelMint Research
Current freight rates (iron ore cargoes)
| Route | Supramax |
| India to China | 7 |
Freights in USD/MT
Source: SteelMint Research
Despite rising crude oil prices, demand for oil rigs did not improve; so no demand for shipping vessels. On 14 Apr’16, crude oil was reported at USD 35.68/barrel.
Baltic Dry Index was recorded at 635 points as on 15Apr’16. The index has, however, undergone an improvement due to demand for Capsize vessels rising slightly on account of demand for iron ore strengthening in China. The index is an indicator of vessel freight rate movement in respect to all types of vessels, carrying commodities, including coal and iron ore.
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