Dry bulk iron ore freights head south w-o-w on low buying interest

• Iron ore spot prices drop $3/t w-o-w
  
  
• Inventories at Chinese ports close to 145 mnt
  
  

Dry bulk iron ore freight rates edged lower this week for key routes. Amid improved iron ore supplies and high stock levels at Chinese ports, there is less urgency for buyers to secure new shipments. In addition, buyers have booked vessels at lower rates for June shipments. Meanwhile, fewer enquiries have been witnessed this week amid softer demand for iron ore. Notably, iron ore inventories at China's major ports continued to remain on the higher side at 144.65 mnt (million tonnes) on 23 May 2024, according to SteelHome data.

Spot prices of iron ore fines (Fe 62%) edged down by $3/tonne (t) w-o-w to $117.85/t CFR China on 29 May amid expectations of a drop in steel demand and prices. Oversupply of iron ore and high stocks at Chinese ports continue to suppress prices. Landing margins have recently been poor, leading some steel mills to restock only as needed to maintain favourable production margins.

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 inched down by $0.7/t this week to $14.3/t on 29 May, as per BigMint's assessment.

Route-wise freight specifications:

• India-China: Freight rates from the Indian Ocean to China have declined this week. A Supramax vessel of iron ore was booked from the east coast region to China at $13.5-14/t, sources informed BigMint.

  As shipowner stated, a Supramax vessel booked from Gopalpur port to North China at $13.5/t, for 6 June shipment.
  
  

• Australia-China: Australian mining companies like BHP, Rio Tinto, and FMG are actively seeking tonnages for June shipments at lower levels of $10-10.2/t. Some enquiries have been fixed for mid-June shipment dates, whereas a few are still under negotiation.

  Rio Tinto have booked two Capesize vessel from Dampier, Australia to Qingdao, China port at $10/t, for 11-13 June shipment, as per sources.
  
  

• Brazil-China: Enquiries in the Pacific region remained quiet this week, reflecting a slight decline in rates. Notably, the market activity at close of trading on 27 May, which coincided with public holidays in the US and UK, saw an absence of fixtures. However, some fixtures are under negotiation.
  
  
• South Africa-China: Freight rates from Saldanha Port to Qingdao have dropped this week. However, an enquiry for a Capesize vessel for mid-June shipment is under negotiation.