Dry bulk iron ore freights show mixed trend, drop in prices weigh on vessel movements

• Australian mining majors actively book large vessels
  
  
• Movement of vessels in Indian ocean slows down
  
  

Dry bulk iron ore freight rates exhibited a mixed trend this week. Demand for high-grade iron ore was boosted by Chinese buyers, resulting in large vessels being booked by Australian and Brazilian miners. However, movement of ships in the Indian ocean slowed down considerably due to bid-offer disparities post-crash in global iron ore prices.

Iron ore (Fe 62%) fines spot prices dropped by $8.25/t d-o-d to $108.40/t CFR China on 11 March 2024. Prices fell to a seven-month low amid bearish market sentiment caused by weak macroeconomic fundamentals along with production cuts by steel mills.

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 a drop of $0.03/tonne (t) w-o-w at $14.47/t on 13 March, as per BigMint assessment.

Route specifications:

• India-China: Saturated demand from Chinese buyers post-Lunar holidays and drop in enquiries for low-grade iron ore have kept freight rates stable. Absence of movement of ships was witnessed in the Indian ocean.
  
  
• Australia-China: Australian miners BHP and Rio Tinto are active, booking large vessels for the delivery period of last week of the current month. The freight rates remained rangebound on fixed enquiries. As per sources, Rio Tinto was heard to have fixed three capesize vessels from Port Dampier to Port Qingdao with 28-30 March laycan in successive order at $13.40/wmt, $13.25/wmt, and $13.05/wmt, respectively.
  
  
• Brazil-China: The freight rates from Pacific region is boosted on increasing enquiries for Tubarao port for the month of April. Fixtures are expected to get confirmed in near future.
  
  
• South Africa-China: Absence of fresh fixtures are recorded, as market players are opting wait-and-watch mode to track the market trend.
  
  

Road ahead

Overall, the global market is firming up. In addition, enquiries for large vessels have been seen as major miners are actively booking vessels. However, demand for smaller vessels have been low on weak buying interest.