Dry bulk iron ore freight rates recover on improvement in China demand

• Spot prices of iron ore fines rise $7/t
  
  
• Freight rates from Indian Ocean to China edge up
  
  

Dry bulk iron ore freight rates rose this week amid improvement in trading activities. Notably, iron ore demand from China has recovered this week pushing freight rates higher. Requirement of large vessels was seen due to the presence of inquiries in the global market. In China, steel mills are planning to increase their finished steel production and increased iron ore demand has contributed to fixing of inquiries across key routes.

Spot prices of iron ore fines (Fe 62%) recovered by $7/tonnes (t) w-o-w to $111/t CFR China on 3 July, 2024 amid firm trading activity following the rise in global shipments. Market participants anticipate further stimulus from the upcoming 15-18 July third Plenum which is expected to focus on deepening reforms. China's portside iron ore prices held steady as the market expected increased demand for finished steel in the near term.

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 rose by $ 0.31/t this week to $14.21/t on 3 July, as per BigMint's assessment.

Route-wise freight specifications:

• India-China: Freight rates from the Indian Ocean to China have inched up this week amid weather disruptions due to the onset of monsoons. Absence of inquires and lack of trade activities from eastern Indian ports to China were seen.
  
  
• Australia-China: Australian mining major BHP has been inquiring for a Capesize vessel from Hedland port to Qingdao for mid-July shipment. It is expected to be fixed shortly. However, fresh inquiries from other miners remain absent for this route.
  
  
• Brazil-China: Freight rates in the Pacific region have moved up due to inquiries getting fixed for the Brazil to China route. Notably, a few Capesize vessels were booked for shipments in mid-July till the first week of August at rates of around $28-30/t.
  
  
• South Africa-China: Movement of vessels in this route has been recorded for mid-July shipments which has boosted freight rates for this route.