Iron ore shipping vessels are feeling a pinch as cargo has diminished over the early winter season. Capesize iron ore freight rates in the Pacific and Atlantic have taken a corresponding tumble. Some iron ore shipping vessels are finding themselves without any cargo. It is reported that as many as 30 shipping vessels were in the Pacific seeking iron ore cargo.
The primary cause appears to be a slowdown in iron ore cargo coming out from Brazil and West Australia, which precipitated lower priced fixtures out of South Africa. Vale, a Brazilian miner, contributes their slowdown to weather, noting that the wet season significantly affected cargo activity. According to Vale, roughly 2.5M metric tons of iron ore shipments were affected by weather conditions, but they think that almost half of this can be made up next month. Other shippers are not so sure, as there is still another month of wet season to pass, which will slow down the loading up and shipping out of cargo. Singapore shippers are looking to a small recovery during January, but still expect the Brazilian route to be very quiet.
Platt analysts point out that Capesize iron ore rates on the West Australian route were at $9.25/wmt on Monday of last week and by Tuesday had already fallen by $1/wmt. Capesize iron ore freight rates on the Saldanha Bay to Qingdao route also fell on Tuesday, down $1.50/wmt from where they stood on the previous day. A similar drop was seen in Capesize rates on the West Australia to Qingdao route, dropping $1/wmt from Monday’s price to $9.25/wmt on Tuesday.
Iron ore shippers will probably head now to Saldanha Bay to capture the iron ore shipments scheduled there for February and attempt to regain some lost ground.