Dry bulk iron ore freight rates inch down w-o-w as Baltic index falls to 1.5 month lows

• Weak demand from China impacts rates
  
  
• Chinese focus shifting to stimulus impact
  
  

Dry bulk iron ore freight rates were lower this week amid weak demand from China. Limited inquiries were recorded this week as market participant are shifting attention to the impact of the stimulus measures, which is leading to lower demand amid the continuing property crisis and low domestic demand for steel. In addition, fall in bunker rates and iron ore futures have pressured freights in global markets.

Factors influencing freight rates

• China's iron ore spot price remain stable: China's spot price of iron ore fines (Fe 62%) was assessed at $105/t CFR on 16 October, stable w-o-w amid weak trading, with Chinese mills maintaining low inventories and buying only as needed. Volatility in the futures market further contributed to uncertainty, prompting traders to adopt a wait-and-watch strategy, which suppressed liquidity and weighed on both seaborne and port stock prices.
  
  
• Baltic index falls to 1.5-month low: The Baltic Dry Index (BDI) was recorded at 1,809 points on 14 October as compared to 1,814 on 2 September. Notably, the Baltic Capesize Index decreased by 264 point m-o-m, falling to 2,835 points against 3,099 about one-and-a-half months back. In addition, the Baltic Supramax Index also dropped by 37 points to 1,269 on 14 October against 1,306 in this period.
  
  

Meanwhile, according to BigMint's assessment, Asia-Pacific Supramax dry bulk freight rates (50,000-55,000 tonnes) for iron ore shipments from the east coast of India to China decreased by $0.25/tonne (t) w-o-w to $13/t as of 16 October.

Route-wise freight market updates:

• India-China: Freight rates from the Indian Ocean to China have been recorded at $13/t, down by $0.25/t w-o-w. According to shipowners, fresh inquiries are under negotiation keeping the freight level pressurised.
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from Western Australia to China were assessed at $9.7/t on 16 October, dropping by $0.7/t w-o-w. According to sources, major Australian miners Rio Tinto and BHP were seen booking vessels at lower freight levels of around $9.8-9.9/t, for end-October shipment period.
  
  
• Brazil-China: Freights for Capesize vessels carrying iron ore from Brazil to China fell this week. Rates for shipments from Tubarao Port to Qingdao Port were assessed at $25.5/t on 16 October, inching down by 1.4/t w-o-w. As per sources, Vale booked a large vessel at a lower freight level of around $24.95/t for end-November shipment.
  
  
• South Africa-China: Capesize freights from Saldanha Bay Port to Qingdao Port inched down by $1.5/t to $18.5/t w-o-w. A fresh fixture was recorded for November shipment at $17.17/t, sources informed.