Platts reported that strong spot market iron ore and related freight activity has helped push Capesize iron ore freight rates on key routes to three-month highs as ship availability remains tight amid the steady offtake of vessels.
Cetragpa reportedly fixed a 160,000 tonnes iron ore cargo from Tubarao to Qingdao on the 2005 built Anangel Fortune at USD 25.50 per tonnes for June 1 loading. This compares with previous business on the route fixed at around USD 23.50 per tonnes.
This puts rates on the route close to their highest level seen so far this year. The market did get to USD 26 per tonnes in the second week of February, before retreating back to a low of USD 15 per tonnes before the current rally started.
Over the last few weeks, freight rates have been climbing steadily and Brazilian iron ore producer Vale has been active on the key Brazil/China iron ore routes.
However, according to brokers, recent disruption, due to flooding, on a key railway line used to carry ore from its massive Carajas mine in Brazil to port could result in some existing fixtures being cancelled, or a slowdown in Vale's pace of chartering. Vale halted railway movements on May 8 on the railway line, but resumed them again on May 11.
One broker said that "Vale has actually not been all that active on the spot freight market in the last week. All of Vale's chartering activity was a couple of weeks ago but other charterers have been in there, and it's been enough to keep ship availability tight. The activity of a few weeks ago meant that ship availability for the second half of May and into early June is very tight."
The last Vale business reported was on May 8, when it fixed a 150,000 tonnes cargo from Tubarao to Qingdao on the 1995 built CHS Bright at USD 21.50 per tonnes.
Rates from Western Australia to China climbed above the USD 10 per tonnes level at the end of the week, which is also a 3 month high and puts that market at close to the highest point seen this year at USD 10.50 per tonnes.
In the latest business reported, BHP Billiton reportedly fixed a 170,000 tonnes cargo at the end of last week from Port Hedland to Qingdao on the 2008 built Genco Constantine at USD 10.25 per tonnes for a June 1 loading. FMG reportedly fixed a 170,000 tonnes iron ore cargo on an undisclosed ship at USD 10 per tonnes, with prompt loading. Last week, rates on this route were hovering between USD 9.50 and USD 9.85, until the USD 10 barrier was broken. As recently as late April, rates on the route were around the USD 7 mark.
(Sourced from Platts.com)
