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Dry bulk freight rates fall as trade activities turn slow

Weaker overseas demand amid approaching CNY holidays weigh on freights Global iron ore prices drop by $10/t w-o-w Dry bulk freight rates experienced a decline this week i...

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17 Jan 2024, 19:25 IST
Dry bulk freight rates fall as trade activities turn slow

  • Weaker overseas demand amid approaching CNY holidays weigh on freights

  • Global iron ore prices drop by $10/t w-o-w

Dry bulk freight rates experienced a decline this week in the global market due to slower trade activities, with the approaching Chinese New Year holiday putting pressure on trade volumes. Asia-Pacific Supramax dry bulk (cargo capacity 50,000-55,000 t) freight rates for an iron ore-loaded Supramax vessel from the east coast of India to China were recorded at $13.25/t on 17 January, 2024, marking a decrease of $0.75 w-o-w, according to SteelMint's assessment.

A shipowner stated, "Freights have dropped, but the movement of ships are strong in the Indian Ocean market owing to previous bookings made aggressively."

SteelMint observed a sluggish demand from China ahead of the upcoming New Year holidays, which could lead to a slowdown in trade activity. Currently, enquiries from China have decreased as ship owners are occupied with completing previous inquiries.

A ship broker conveyed, "Freight has fallen and remains challenging, so one should not anticipate a significant push. However, disruptions in the Red Sea and adverse weather conditions in the Far East could offer some support."

Meanwhile, the disturbance in the Red Sea persists, causing disruptions in ship movements and posing challenges for shipping and insurance companies. Although there has not been a notable impact on bulk vessel freights, container freight rates have experienced an increase, influencing scrap vessel freight rates.

Capesize freight rates fall w-o-w - Capesize dry bulk (cargo capacity 160,000-170,000 t) freight rates experienced a decrease this week. The Capes market has witnessed a slowdown, with few enquiries noted for the month of February post-holidays. Limited cargo volumes and decreased demand for large vessels have been reported, as per sources.

Outlook: Dry bulk freight rates are expected to increase by 5-10% in 2024, according to reports. This surge is attributed to the demand for economic stability, container shortages, and reduced ship capacity. Travel times have been impacted due to restrictions in the Red Sea and Suez Canal, contributing to the anticipated rise in rates.

17 Jan 2024, 19:25 IST

 

 

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