The price to ship iron ore from Australia to China plummeted for the third straight day, dragged down by lower Chinese imports.
The average spot rate for the benchmark C10 transpacific roundtrip voyage has fallen 57% since Monday to $16,817 per day on Thursday, according to the Baltic Exchange.
The Baltic 5TC, a measure of average spot market rates for capesize bulkers, slid $3,134 on Wednesday to $24,003 per day.
The drop in the Western Australia-to-China route is probably due to easing port congestion, better weather and miners slowing down exports as the year closes, according to John Kartsonas, founder of Breakwave Advisors' dry bulk exchange traded fund trading platform.
"All the above are bearish for capesize rates in the near term," he told TradeWinds.
"This is not surprising. This is a seasonal market."
He said rates should rebound when China ramps up imports after the holidays.
Individual fixture data was not available on Thursday, but in recent days, Rio Tinto has fixed the lion's share of capesize spot voyages from Western Australia to China.
China's imports of Australian iron ore have fallen 8.1% to 830m tonnes so far in 2021 as Beijing looks to reduce its trading dependence on Australia and rein in steel output ahead of the 2022 Winter Olympics.
But Kartsonas doesn't see how China can afford to stop importing iron ore from Australia.
"China is 65% of the global market, and Australia is 70% of that," he said.
