• BIST 109.330
  • Altın 155,894
  • Dolar 3,8638
  • Euro 4,5501
  • İstanbul 17 °C
  • Ankara 3 °C

Iron Ore Drives Bulker Rally

Iron Ore Drives Bulker Rally
The dry bulk market shrugged off Chinese government-enforced cuts in steel production to post more positive freight rates in October, with average monthly spot and one-year time charter rates higher than any month since 2014 for all bulker benchmarks.

Iron ore imports to China remain the strongest driving factor despite the downside risks. The most recent steel data available show a slowdown from the very high production levels of the third quarter, but there is still robust demand for tonnage for ore imports. Iron ore and coking coal prices in China have both risen by about 17 percent so far in November, another sign that there is still strong demand for tonnage.

According to data derived from AIS movements, Brazilian exports in Capesize vessels were up 6.5 percent year-on-year and those from Australia 3.1 percent year-on-year in October. The contradiction of weaker steel output and stronger ore imports is partly explained by lower domestic ore output: September was the worst month for ore production since May and a 13 percent drop since the peak in June.

“This has been a key tenet supporting MSI's forecast of stronger freight rates towards the end of this year and is an indication of Chinese steel manufacturers’ increasing preference for higher quality iron ore found in Australia and Brazil,” says MSI Dry Bulk Analyst Will Tooth. “MSI expects that the Chinese government’s focus on pollution will see even greater shifts away from the use of domestic ore with a lower iron content, due to the greater emissions produced.”

However, MSI forecasts a drop in spot earnings by January next year for all size categories with largest drop expected to come from Capesize earnings. It expects Capesize earnings of around $12,700/day in January, a 36 percent decline from October’s average.

Further compounding a weaker market in January, MSI forecasts an annualized fleet growth of 2.5 percent over the next three months. This relatively strong growth mainly comes from the large increase in deliveries that it expects in January.

“However the better news for the market is that deliveries are expected to slow thereafter, particularly for the 10-65,000dwt segment for which the orderbook currently represents just five percent of the fleet,” adds Tooth. “Slower deliveries and a seasonal uptick in demand will support rates in the second quarter next year, and we forecast an increase in April by on average 23 percent from January's lows.”

Recent freight rate developments broadly match historical trends, with Capesize October earnings 147 percent of the annual average for the past five years and January spot earnings 87 percent of the annual average historically.

This news is a total 540 time has been read
  • Comments 0
    UYARI: Küfür, hakaret, rencide edici cümleler veya imalar, inançlara saldırı içeren, imla kuralları ile yazılmamış,
    Türkçe karakter kullanılmayan ve büyük harflerle yazılmış yorumlar onaylanmamaktadır.
    Bu habere henüz yorum eklenmemiştir.
Other News
All Rights Reserved © 2006 TURKISH MARITIME | İzinsiz ve kaynak gösterilmeden yayınlanamaz.
Phone : 0090 212 293 75 48 | Fax : 0090 212 293 75 49 |