Strong Capesize demand supports dry bulk iron ore freight rates

• Workers call off strike at Indian ports
  
  
• Spot iron ore prices rise w-o-w in China
  
  

Dry bulk iron ore freight rates showed a mixed trend this week. Shipowners were actively seeking cargoes for larger vessels in the global market. A few fixtures were noted from India to China, but fresh inquiries remained limited.

Asia-Pacific Supramax dry bulk (50,000-55,000 tonnes (t)) freight rates for iron ore vessels from the east coast of India to China inched down by $0.24/t w-o-w, reaching $12.9/t as of 28 August.

Route-wise freight market updates:

• Australia-China: Freight rates for Capesize vessels carrying iron ore from Western Australia to China were assessed at $11/t on 28 August, marking an increase of $0.1/t w-o-w. Three major Australian miners were reported to be active in the market, seeking cargoes for September shipments.
  
  
• Brazil-China: Freight rates for Capesize vessels carrying iron ore from Brazil to China inched up this week. Rates for a shipment from Tubarao to Qingdao were assessed at $26.4/t on 28 August, up by $0.95/t w-o-w. As per sources, a vessel was booked from Tubarao to China at $26.65/t, shipment is scheduled on 16-17 September.
  
  
• South Africa-China: Capesize freights from Saldanha Bay to Qingdao inched up by $1.3/t w-o-w to $20/t.
  
  
• India-China: Freight rates from the Indian Ocean to China have been recorded at $12.9/t, down by $0.24/t w-o-w. A Supramax vessel has been booked from Dhamra port to China at a freight rate of $12.8/t, with the shipment scheduled for this week as loading has commenced, sources told BigMint. Notably, market participants are seeking fresh inquiries, as current spot requirements are already covered.
  
  

Key market updates:

• Workers call off port strike: Indian port workers were set to commence a strike on 28 August, demanding better wages and benefits. However, the strike has been deferred following a memorandum of understanding (MoU) reached between the Chairman and Managing Director of the Indian Ports Association and representatives of various federations. This agreement was facilitated by the intervention of Sarbananda Sonowal, the Minister of ports, shipping and waterways who helped settle the fitment percentage issues.
  
  
• Baltic index for Capesize rises w-o-w: The Baltic Index for Capesize vessels (BCI) increased by 300 points w-o-w on 26 August, reaching 2,851 points, up from 2,537 points. However, other vessel indices are showing a negative trend. According to sources, demand for Capesize vessels has risen as all three major Australian miners are actively booking vessels to boost fiscal year-end sales and stabilise finances.
  
  
• China spot prices increase w-o-w: China's spot prices of iron ore fines (Fe 62%) were assessed at $101/t CFR China on 28 August, marking a w-o-w increase of $6/t. This rise is attributed to positive macroeconomic factors, including expectations of lower U.S. interest rates. Additionally, the market is focussing on factors such as steel mill margins, the peak steel demand season, and low inventory levels for finished steel, which could drive a near-term recovery in both steel and iron ore prices.