Dry bulk iron ore freights fall w-o-w amid Lunar New Year holidays

• Major routes see absence of fixtures
  
  
• Falling bunker prices pressure freights
  
  

Dry bulk iron ore freights from the Indian Ocean to China continued their downtrend this week, primarily due to reduced market activity amid the Lunar New Year holidays. The temporary slowdown in demand for vessel bookings, coupled with limited rate negotiations, resulted in a softer freight market. Additionally, declining bunker prices exerted further pressure on shipping costs, contributing to the overall weakness in freights.

Capesize freights declined due to limited market support despite the presence of major miners in the Pacific, as fixtures remained subdued, with deals concluded at lower levels. The ongoing Chinese New Year celebrations further dampened activity, as major routes saw an absence of fixtures. Additionally, minimal demand from South Brazil and West Africa to China, coupled with a widening bid-offer gap, created market uncertainty and a slight shift in sentiment.

According to BigMint's assessment, Asia-Pacific Supramax dry bulk freights (50,000-55,000 t) for iron ore shipments from the east coast of India to China fell by $0.6/t w-o-w to $8/t on 29 January.

China's iron ore spot prices remain stable w-o-w: China's spot prices of iron ore fines (Fe62%) were assessed at $104.75/t CFR on 28 January, firm w-o-w amid limited trading activity ahead of the holidays, balanced by selective demand for low-alumina materials, which offset broader market pressures from ample cargo availability. While high-alumina cargoes faced discounts due to oversupply, the overall market saw marginal buying interest, which kept prices range-bound.

Route specifications

• India-China: Freights from the Indian Ocean to China were recorded at $8/t, dipping by $0.6/t w-o-w. According to sources, the decline in freights is because many traders exited early for Lunar New Year celebrations and there was an oversupply of vessels.
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from Western Australia to China were assessed at $5.8/t on 29 January, falling by $0.4/t w-o-w. According to sources, major Australian miners Rio Tinto, FMG, and BHP were seen actively booking Capesize vessels from a Western Australia port to Qingdao Port at around $5.55-5.80/t. Shipment is scheduled for 11-18 February.
  
  

• Brazil-China: Freights for Capesize vessels from Brazil to China fell this week. Rates from Tubarao to Qingdao Port were assessed at $17/t on 29 January, decreasing by $0.6/t w-o-w. As per sources, there was weak market sentiment and lower bids on the Brazil-China route, which was reflected in the recently concluded fixtures. Limited fresh activity and multiple charterers seeking vessels for forward laycans further pressured rates downward.
  
  
• South Africa-China: Capesize freights from Saldanha Bay Port to Qingdao Port decreased by $0.55/t w-o-w to $12.15/t. Freights fell due to sluggish trading activity and a lack of fresh cargo inquiries.