India: Dry bulk iron ore freight rates drop further amid persistently weak demand

• Pacific market sees oversupply in year-end vessels
  
  
• Spot iron ore prices drop w-o-w in weak trading
  
  

Dry bulk iron ore freight rates continued to downtrend this week, influenced by weak trading activity in the Pacific basin, cautious market sentiments, and a lack of fresh inquiries. The combination of constrained demand and stagnant market conditions further pressured rates. This absence of positive market momentum led to a continued decline in freight rates.

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 dropped $0.2/tonne (t) w-o-w to $11/t on 18 December.

Factors influencing freight rates

• Baltic index declines w-o-w: The Baltic Dry Index (BDI) was recorded at 1,051 points on 16 December, down by 116 points w-o-w. Additionally, the Baltic Capesize Index stood at 1,263 points, falling by 272 points w-o-w. Meanwhile, the Baltic Supramax Index declined by 15 points w-o-w to 959 points.
  
  
• China's iron ore spot prices fall by $1/t w-o-w: China's spot prices of iron ore fines (Fe62%) were assessed at $105.35/t CFR on 17 December, down by $1/t w-o-w amid abundant portside inventories and increased preference for cost-effective alternatives which offer favourable specifications. Blending options and weak buying interest for seaborne cargoes arriving during the Lunar New Year have further dampened demand, softening seaborne cargo premiums.
  
  

Route specifications

• India-China: Freights from the Indian Ocean to China were recorded at $11/t, having fallen by $0.2/t w-o-w. According to sources, a Supra vessel of iron ore got booked from Paradip to Qingdao Port at $9.50/t for shipment in the first week of January.
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from western Australia to China were assessed at $7.3/t on 18 December, down by $0.2/t w-o-w. The Pacific market experienced an influx of vessels competing for end-December and early-January loading cargoes, resulting in an oversupply. This heightened competition pressured shipowners to accept reduced rates to secure charters.
  
  

• Brazil-China: Freights for Capesize vessels from Brazil to China declined this week. Rates from Tubarao to Qingdao Port were assessed at $16.6/t on 18 December, decreasing by $0.9/t w-o-w. BigMint observed that demand for long-haul cargoes typically declines toward year-end as iron ore production and exports slow down during the holiday season, resulting in reduced cargo availability.
  
  
• South Africa-China: Capesize freights from Saldanha Bay Port to Qingdao Port dropped by $1.3/t w-o-w to $12/t. The decline was driven by a lack of fresh fixtures, weakened demand, and ongoing logistical challenges.