Average capesize spot rates leapt up by 21% on Tuesday as much of the market returned to work after public holidays.
The Baltic Capesize Index assessment was not published on Monday due to a UK public holiday. Meanwhile, many market participants took a break to celebrate Orthodox Easter.
Fixing activity by major miners has been steady in the Pacific but appears to have slowed in the Atlantic as tonnage lists in the north of the basin run short relative to cargo supply, driving up rates.
This led to Baltic panellists assessing average capesize spot rates at $26,900 per day on Tuesday, which is $4,698 higher than on Friday. The assessment is the weighted average of rates across five key benchmark routes (5TC).
The assessment is at its highest level for six weeks, largely on the back of a hefty increase in assessments for transatlantic round trips from northern Europe.
“Other than the miners’ activity, brokers have also reported overall decent cargo volumes. Conditions in the Atlantic have shown notable improvement from South Brazil and West Africa to the Far East,” the Baltic Exchange said in its daily market report on Tuesday.
“The North Atlantic has experienced heightened activity, with an uptick in cargo volume and a more limited availability of ships, leading to recent rate increases.”
A massive $10,100 was added to the transatlantic round-trip assessment on Tuesday, which reached $27,600 per day. The benchmark contributes 25% to the 5TC basket assessment and has more than doubled over the past seven days.
The transpacific round trip, which also contributes 25% to the 5TC assessment, has also become more expensive but to a less dramatic extent. Panellists put the trip $4,264 higher on Tuesday at $28,800 per day. This is up by 37% over the past week.
Iron ore
Baltic panellists added another 95 cents to their assessment of spot rates for iron ore voyages from West Australia to Qingdao. The voyage was assessed at $11.65 per tonne on Tuesday.
The Pacific has been leading the way in terms of the number of reported fixtures.
Three major mining firms — Rio Tinto, Fortescue Metals Group (FMG) and BHP — have been active in fixing capesizes for iron ore voyages to China over the past few trading days.
Four more fixtures from BHP and FMG came to light on Tuesday, one of which was fixed the previous day, in deals that show the rapid increased in freight rates for iron ore runs from Australia to China.
BHP reportedly fixed Maran Dry’s 180,400-dwt Maran Trust (built 2012) at $11.65 per tonne, loading at Port Hedland from 23 May.
This is 65 cents per tonne more than what the miner agreed to pay for the voyage on Monday, when it fixed Golden Ocean’s 180,500-dwt Golden Arcus (built 2018) for similar loading dates.
In the Atlantic, the Brazil-China benchmark route was assessed 84 cents higher at $27.505 per tonne, the highest level since late March, though reported fixtures have been thin.
This came on the back of two new fixtures reported on Tuesday for iron ore runs from Tubarao to Qingdao, both booked at $27.50 per tonne.
Costamare Bulkers was said to have fixed the 182,600-dwt First Phoenix (built 2020) last Friday for loading dates from 1 June. Solebay Shipping is said to have booked the 203,500-dwt newcastlemax XH Sanmen Bay (built 2007), loading at Tubarao from the end of June with an option for a call in West Africa.
Also on Tuesday, energy and commodities group Simec reportedly fixed an unnamed Classic Maritime capesize for an iron ore voyage to China from Whyalla in southern Australia, where Simec’s Australian mining activities are focused. The rate was reported at $16.20 per tonne, loading from the first week of June.
This is much cheaper than what Simec paid the last time it fixed a vessel for the voyage. A week ago, the firm booked the 57,000-dwt supramax Zhong Chang 228 (built 2011) at $25 per tonne, loading near the end of May.
Futures
The big increase in the 5TC spot market index on Tuesday meant that forward freight agreements (FFAs) for May had some catching up to do. The contract settled $3,750 higher at $30,300 per day.
This shunted paper for June forward by just over $2,000 to $32,300 per day at the end of Tuesday’s trading.
Second-quarter contracts printed at $27,500 per day, up by $1,924 from Monday’s close.
Modest increases were seen across all other capesize contracts.
