Tuesday, July 12,
Despite firm commodity and energy prices, the overall index has fallen over 15 percent since the beginning of the year, and traders say the outlook for dry bulk rates remains grim because ship supply has outpaced demand to ship commodities.
“Capsize rates are under heavy pressure in the Pacific as Chinese iron ore demand is pretty low in the spot market at the moment,” one trader said.
The situation has been compounded by the deployment of a vessel owned by top iron ore producer Vale of Brazil, the first of the world’s largest dry bulkers to enter the fleet.
India’s monsoon was also reducing iron ore exports as rivers rise, hampering goods transportation.The handy size vessel orders have gone down considerably since June owing to the scarcity of iron ore cargos from Indian ports. The current Panamax rates hovers around $15 to $16 for East India-north china route.
Traders said dry bulk freight rates were expected to remain subdued in July on the back of the Indian monsoon season, which will most likely reduce iron ore exports from India.
Also China may import lower volumes of iron ore due to its current high level of inventories.
Source: Reuters
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