The Capesize market opened the new trading week on a sluggish note while trading activity remained largely thin. After a sharp retracement in the trading week ended May 14, Platts
Cape T4 index of non scrubber-fitted ships dropped $8,502/d week on week to settle at $32,366/day on May 14, a drop of 20%.
The Capesize freight forward agreement segment edged up and a few market players called it an “oversold relief bounce” rather than a signal of bottoming.
“The sell-off in the Pacific on the back of West Australia to China fixtures gives the market visibility that freight rates seemingly are yet to touch the bottom,” a ship-operating source said.
A lengthy ballaster list as well as weak demand in the Atlantic basin forced owners to make concessions with lower offers.
Pacific market
Healthy cargo demand failed to support freight rates in the Pacific basin and most players stayed on the sidelines, with limited trading activities. With the financial years of miners BHP and Fortescue Metals ending on June 30, market players said both were likely to significantly
step up shipments in May and June to optimize revenues, particularly at a time of record iron ore prices.
Fixture-wise, FMG was heard to have fixed a Capesize ship for moving iron ore cargoes from Port Hedland to Qingdao at $11.70/wmt for early June laycan.
The indicative freight heard on the West Coast Australia to Qingdao route was in the $11.65/wmt to $11.70/wmt range.
The freight rate for a Capesize ship to move 170,000 mt (plus/minus 10%) of iron ore on the Port Hedland-Qingdao route was assessed at $11.70/wmt, down 45 cents/wmt from May 14.
Atlantic market
The Atlantic Capesize shipping market was still on the downward trajectory with minimum exchanges on May 14, market participants said.
“Much fewer ballasters observed over the weekend as compared to the week before,” a shipbroker said, However, there exists a long list of standard and newcastlemax sized ballasters available up till mid-June dates, the same source added.
Brazilian miner Vale was heard fixing ships at $26/wmt for moving iron ore from Tubarao to Qingdao for mid-June laycan.
The indicative freight levels heard on the Brazil to China route were in the $25.5/wmt to $27/wmt range for second-half June dates.
The freight rate for a Capesize ship to move 170,000 mt (plus/minus 10%) of iron ore from Tubarao to Qingdao was assessed at $26/wmt, down 70 cents/wmt day on day.
Out of South Africa, a few coal shipping requirements out of Richards Bay were observed without much talks. The freight rate for a Capesize ship to move 170,000 mt (plus/ minus 10%) of iron ore from Saldanha Bay to Qingdao was assessed at $19.80/wmt, down 60 cents/mt from May 14.
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