India: Dry bulk iron ore freights drop w-o-w following subdued demand

• Decline in bunker prices weigh on freights
  
  
• Availability of vessels outstrips cargo demand

  
  
  

India's dry bulk iron ore freights dropped this week amid subdued trading activity and limited buying interest. The lack of demand for iron ore, driven by weak global steel market conditions, significantly reduced shipping requirements from Indian coasts.

Additionally, a surplus of vessels in the region, relative to cargo demand, and a downtrend in bunker prices further pressured freights. These factors indicate overall weak sentiments in the Asia-Pacific Supramax market.

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 by $1.3/tonne (t) w-o-w to $10.7/t on 8 January.

Factors influencing freights

• Baltic indices show mixed trends w-o-w: The Baltic Dry Index (BDI) was recorded at 1,072 points on 6 January, up by 82 points w-o-w. Additionally, the Baltic Capesize Index stood at 1,375 points, increasing by 260 points w-o-w. However, the Baltic Supramax Index declined by 56 points w-o-w to 884 points, reflecting poor demand.
  
  
• China's iron ore spot prices drop by $3/t w-o-w: China's spot prices of iron ore fines (Fe62%) were assessed at $97.25/t CFR on 7 January, down by $3/t w-o-w amid slow trading activity due to weak fundamentals ahead of the Lunar New Year holidays. Seaborne demand is not expected to improve in the near term. Consequently, low-grade and discounted products will likely remain the most cost-effective option for end-users. As per reports, raw material prices and margins are expected to remain low.
  
  

Route specifications

• India-China: Freights from the Indian Ocean to China were recorded at $10.7/t, having fallen by $1.3/t w-o-w. According to sources, a Supra vessel of iron ore was booked from Paradip to Qingdao Port at $11/t last week. Sources indicated bids as low as $7, but no shipowners lowered offers to that extent. Limited inquiries kept freights under pressure.
  
  
• Australia-China: Freights for Capesize vessels carrying iron ore from western Australia to China were assessed at $6.6/t on 8 January, up by $0.1/t w-o-w. According to sources, two Capesize vessels were booked from a western Australian port to Qingdao Port at around $6.50/t. The shipment is scheduled for 23-27 January.
  
  

• Brazil-China: Freights for Capesize vessels from Brazil to China inched up this week. Rates from Tubarao to Qingdao Port were assessed at $17.2/t on 8 January, increasing by $0.4/t w-o-w. However, no fixtures were recorded on this route.
  
  
• South Africa-China: Capesize freights from Saldanha Bay Port to Qingdao Port increased by $0.3/t w-o-w to $12.2/t. As per sources, two Capesize vessels were booked from Saldanha Bay Port to Qingdao Port at around $11.45/t. The shipments are scheduled for 25-29 January.