Iron ore freight rates diverged in September, with Brazil-China routes strengthening while Australian shipments to China became cheaper.
Iron ore freight rates moved in opposite directions during September, reflecting differences in vessel availability and demand across the main trade routes.
On the Tubarão, Brazil–Qingdao, China route, freight rates rose to $43 per tonne on 25 September. That was 5.4% higher than on 4 September, according to Kallanish.
On the much shorter Western Australia–Qingdao route, the trend was reversed. Freight rates fell to $15.95 per tonne, down 11.1% over the same period.
Atlantic market more stable
The Capesize market, dominated by iron ore and coal transport, showed clear regional differences.
The Atlantic remained relatively stable, supported by cargo flows from Brazil and West Africa to China and more limited vessel availability.
The Pacific market was more volatile. Periods of stronger demand were quickly followed by rate pressure as more vessels became available.
Higher bunker fuel prices and uncertainty in the Middle East also affected market sentiment.
The Baltic Dry Index fell by 2.8% on 29 September to 3,178 points. The Capesize Index dropped by 4.6% to 5,103 points, its lowest level since late August.
China remains the key factor
The Chinese holiday period in early October is expected to reduce market activity further.
At the same time, the China Iron and Steel Association has urged domestic producers to limit steel output. Weak demand for steel and iron ore is therefore continuing to create uncertainty.
Iron ore prices also slipped back below $100 per tonne at the end of September as Chinese buyers largely completed pre-holiday restocking.
Sources: Kallanish, Baltic Exchange, Intermodal and GMK Center.
