Dry bulk iron ore freights drop as Baltic index hits 8-month low

• China's iron ore prices drop amid output curbs
  
  
• Falling Chinese demand limits portside cargoes
  
  

Dry bulk iron ore freights declined this week as the Baltic index plummeted to an eight-month low, last seen in February 2024. Limited tonnage was observed due to declining demand from China, which kept rates under pressure. The drop in demand in China stemmed from market uncertainty, as participants held off from deals, waiting to see the impact of the stimulus package. In the Indian Ocean and Pacific regions, there was lower availability of ships due to fewer fixtures and cargoes for China, sources informed BigMint.

Meanwhile, according to BigMint's assessment, Asia-Pacific Supramax dry bulk freights (50,000-55,000 tonnes) for iron ore shipments from the east coast of India to China dropped by $0.1/tonne (t) w-o-w to $12.9/t on 23 October.

Factors influencing freights

• Baltic index drops to 8-month low: The Baltic Dry Index (BDI) was recorded at 1,576 points on 21 October, its lowest level since 12 February's 1,545 points. Notably, the Baltic Capesize Index stood at 2,276 points against 2,030 points on 5 February. Additionally, the Baltic Supramax Index declined to 1,250 points on 21 October against 1,189 points on 26 February.
  
  
• China's iron ore spot prices drop w-o-w: China's spot prices of iron ore fines (Fe 62%) were assessed at $100/t CFR on 23 October, down by $5/t w-o-w amid weak market sentiments, driven by low buying interest, as several northern Chinese cities, including Tangshan and Handan, implemented level-2 emergency responses due to heavy air pollution forecasts. This prompted production curbs on steel mills, which prioritised using existing inventories rather than procuring new material, reducing demand.
  
  

Route-wise freight market updates

• India-China: Freights from the Indian Ocean to China were recorded at $12.9/t, largely stable w-o-w. According to shipowners, a Supra vessel was booked from the Dhamra Port to China at $13.10/t for laycan time 1-5 November. However, fresh inquiries were limited, keeping freights under pressure.
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from Western Australia to China were assessed at $8.6/t on 23 October, a fall of $1.1/t w-o-w. According to sources, major Australian miners Rio Tinto, BHP, and FMG sought tonnages at around $8.85/t for November shipment.
  
  
• Brazil-China: Freights for Capesize vessels carrying iron ore from Brazil to China dropped this week. Rates for shipments from Tubarao Port to Qingdao Port were assessed at $21.1/t on 23 October, a decrease of $4.4/t w-o-w. As per sources, the lack of inquiries for the route and falling bunker prices weighed on freights.
  
  
• South Africa-China: Capesize freights from Saldanha Bay Port to Qingdao Port declined by $2.2/t to $16.3/t w-o-w. A fresh fixture was recorded for mid-November shipment at a lower level of around $15.04/t, sources informed.