India: Dry bulk iron ore freight rates exhibit mixed trends w-o-w

• Fluctuations in bunker prices seen throughout this week
  
  
• Upcoming holidays keep prices supported for India-China route
  
  

Dry bulk iron ore freight rates showed mixed trends this week, driven by recovery in import demand tied to China's steel production and seasonal restocking. 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 increased $1/tonne (t) w-o-w to $12/t on 24 December.

As Europe approaches its holiday season and most shipowners begin their long leave from tomorrow, reduced market activity could create upward pressure on freight rates, highlighted an eastern India based pellet exporter.

However, limited trading activity was noted due to a disparity between bids and offers, coupled with shipowners reluctance to lower freight rates. This cautious market sentiment has kept significant rate fluctuations in check.

Factors influencing freight rates

• Baltic indices touch new low: The Baltic Dry Index (BDI) was recorded at 990 points on 23 December, down by 61 points w-o-w. Additionally, the Baltic Capesize Index stood at 1,115 points, falling by 148 points w-o-w. Meanwhile, the Baltic Supramax Index declined by 19 points w-o-w to 976 points.
  
  
• China's iron ore spot prices drop $4/t w-o-w: China's spot prices of iron ore fines (Fe62%) were assessed at $101.55/t CFR on 23 December, down by $4/t w-o-w driven by lack of improvement in market fundamentals, as reflected in the ongoing weak demand. In China, rebar destocking has improved this week, mainly due to low production rather than stronger demand. Meanwhile, the US dollar strengthened after the Federal Reserve cut interest rates by 25 basis points to 4.25%-4.5% on 18 Dec, signalling potential further cuts in CY25.
  
  

Route specifications

• India-China: Freights from the Indian Ocean to China were recorded at $12/t, having risen by $1/t w-o-w. However, some fresh fixtures are under negotiations, might get concluded in this week which have supported freight rates for the route, source informed BigMint.
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from western Australia to China were assessed at $6.5/t on 24 December, down by $0.8/t w-o-w. According to sources, major Australian miner Rio Tinto was seen booking vessels at lower freight levels of around $6.45/t, for mid-January shipment period.
  
  

• Brazil-China: Freights for Capesize vessels from Brazil to China declined this week. Rates from Tubarao to Qingdao Port were assessed at $16.8/t on 24 December, increasing by $0.2/t w-o-w. However, no fresh fixtures have been recorded in this route.
  
  
• South Africa-China: Capesize freights from Saldanha Bay Port to Qingdao Port inched down by $0.1/t w-o-w to $11.9/t. BigMint observed that subdued activity in the Brazilian market and a lack of significant demand in the region, keeping freight rates under pressure.