Dry bulk iron ore freights remain supported, marginal downslide likely

• Freight rates from India to China fall marginally
  
  
• Higher bunker prices keep rates supported
  
  

Dry bulk iron ore freight rates emerged stronger this week. The demand for iron ore surged as Chinese buyers are active in the global market. Significantly, the major miners are back in action; enquiries for large vessels have increased. In addition, bunker prices have edged up resulting in limited exchanges.

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 were recorded at $14.5/tonne (t) on 6 March, 2024, according to BigMint's assessment.

Route specifications:

• India-China: In the Indian Ocean, some movement of ships have been recorded. A shipowner confirmed, JSW booked two Supramax vessels from Dhamra and Vizag ports to North China at $15.50/t and $15.25/t, respectively.
  
  
• Australia-China: Australian major miners FMG and Rio Tinto are actively booking large vessels. The miners are seeking tonnages for end of March. Trade activities are expected to rise thereby supporting freight rates.
  
  
• Brazil-China: This route witnessed some movement as demand from the Pacific region is volatile whereas charterers are trying to cover up laycan vessel as tonnage list is not long. Lacklustre enquiries are seen in the absence of fresh fixtures for the route.
  
  
• South Africa-China: Rising demand from China and strong market sentiments have supported freight rates, as some enquiries are still under negotiation.
  
  

Capesize rates inch up w-o-w: Capesize freight rates for iron ore recorded a significant rise in key routes. High demand of large vessels have increased trade volumes despite higher bunker prices. A shipowner stated, availability of cargos are recorded from the period of end March to early April laycan. Therefore, owners are grabbing this opportunity. Meanwhile, some enquiries for key routes are still under negotiation.

Road ahead

Overall, the global market is seeing a correction and in the near term freights may soften for smaller vessels as enquiries are under negotiation but not getting concluded. Demand for large vessels are increasing as major miners are actively scheduling their vessels.