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PrintCapesize iron ore freight rates on established Pacific routes from Brazil, Western Australia and South Africa trended in different directions Thursday as supply-demand factors varied across regions.
The Western Australia to Qingdao route witnessed a flurry of fixtures late Wednesday, but Thursday saw charterers bidding and concluding fixtures at lower levels than the previous day.
Market sources reported a number of fixtures concluded by BHP Billiton Wednesday in the $10-10.25/wmt range on the Port Hedland to Qingdao route for end-November/early-December laycan.
Thursday morning, however, saw the miner reportedly bidding, and eventually concluding fixtures, at $9.90/wmt for 5-7 December laycan, market sources said. An official with the miner declined to confirm these reports.
Pressure mounted on the market through the day as charterers sought fixtures at rates lower than previously concluded levels on this route.
For instance, early Thursday, trading house Louis Dreyfus was offering a Capesize vessel at $10.20/wmt for mid-December laycan.
A Singapore-based official said he had received "a couple of bids" at $10/wmt, which he was disinclined to accept at the time.
By late afternoon, the official had pared his offer to $9.80/wmt with no bids to match.
"Miners are holding off a bit to let it [the market] cool," another Singapore-based charterer said, adding that the surge in demand for vessels seen Wednesday was only temporary.
"The party's over," a Singapore-based shipbroker said. Offers of "$10-10.50/wmt are a bit silly now. That is not where the market is right now," he said, adding that shipowners may need to pare their offers in order to attract any chartering interest.
Charterers had secured enough vessels, he said, adding there was no rush to fix more vessels. "Waiting has an amazing ability to pull the market down," he said.
Platts assessed the Capesize iron ore freight rate from Port Hedland to Qingdao at $9.80/wmt Thursday, up 80 cents on the day.
What spurred demand for vessels on this route Wednesday remains unclear, however.
While BHP refused to divulge any details, market participants generally spoke of bad weather causing delays in the arrival of ships, ballasting from China, towards Australia, but this could not be confirmed.
Some market participants also spoke of Capesize vessels ballasting towards Richards Bay on an expected uptick in South African coal shipments into India and China.
But others said only a few vessels had ballasted towards Richards Bay and reckoned this was unlikely to pressure vessel tonnage and lift freight rates in the Pacific.
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