Dry bulk iron ore freights rise w-o-w as demand for Capesize vessels remains bullish

• Capesize market bullish, active inquiries seen
  
  
• Baltic index recovers w-o-w
  
  

Dry bulk iron ore freight rates have gained strength this week. Inquiries for larger vessels have improved as major miners were heard actively seeking cargoes.

However, lacklustre activities were heard in the Indian Ocean due to lack of demand and availability of vessels in the portside, which prevented a sharp hike in freight rates in the India-China route.

A shipowner stated, "Supra freight remained lower due to lack of cargoes and sufficient vessels available, as the market is expected to remain sluggish until December or maybe until the first quarter."

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 inched up marginally w-o-w to $12.5/t on 13 November.

Factors influencing freights

• Baltic index recovers w-o-w: The Baltic Dry Index (BDI) was recorded at 1,495 points on 11 November, up by 117 points w-o-w. Notably, the Baltic Capesize Index stood at 2,316 points, up 468 points w-o-w. However, the Baltic Supramax Index declined to 1,079 points, down 84 points w-o-w.
  
  
• China's iron ore spot prices drop w-o-w: China's spot prices of iron ore fines (Fe 62%) were assessed at $101/t CFR on 6 November, down $5/t w-o-w amid limited trades and weak demand, driven by diminishing landing margins for mainstream brands. With portside inventories relatively high, mills preferred portside to seaborne purchases, particularly for non-mainstream cargoes offering better discounts. A seasonal slowdown in steel demand also limited buying, weighing on demand for seaborne iron ore.
  
  

Route specifications:

• India-China: Freights from the Indian Ocean to China were recorded at $12.5/t, a hike of $0.25 w-o-w. According to shipowners, "The Supramax market is still softening. Some owners are not able to resist anymore and have started to lower their rates."
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from Western Australia to China were assessed at $10.23/t on 13 November, rose by $1.63/t w-o-w. According to sources, major Australian miners Rio Tinto and FMG were seen actively booking cape vessels from Dampier Port to Qingdao Port at around freight $10.20-10.30/t. The shipment is scheduled on end-November dates.
  
  
• Brazil-China: Freights for Capesize vessels carrying iron ore from Brazil to China surged this week. Rates for shipments from Tubarao to Qingdao port were assessed at $24.32/t on 13 November, a increase of $3.77/t w-o-w. As per sources, a cape vessel is booked at freight $24.25/t from Tubarao port to Qingdao port. The shipment is scheduled for 13-17 December.
  
  
• South Africa-China: Capesize freights from the Saldanha Bay Port to Qingdao Port inched up by $2.5/t w-o-w to $18.5/t. Absence of inquiries and lack of movement of ships for the route.