A long wait for freight

It is the usual time of the year again, when the market took a break for the Lunar New Year celebrations.

The quietness was then rocked by the unfolding events from Vale’s dam collapse incident, which will greatly affect seaborne iron ore supply.

So far, the Brazilian miner may potentially lose a further 30mt per year of iron ore output from its Brucutu mine due to a court ruling.

This was on top of the 40mt per year output loss from the miner’s decision to decommission 10 dams after the fatal dam collapse in Brumadinho.

Gloomy, gloomy Capesize

With a total of 70mt reduction from the Brazil-China route, the Capesize market has bitter fruit to chew and little to cheer throughout the week.

As expected, an aggressive sell-off was seen in the Capesize paper market this week, fanned by the troubling news from Vale.

The selloff may deepen further as the market sees few bright spots with Chinese trade participants largely absent celebrating their week-long Spring festival.

Thus, there was a general market consensus that freight rates could slide further especially on the Tubarao-Qingdao route. The only optimism probably hinges in waiting for the return of Chinese traders next week for better market clarity.

Thus, the Capesize 5 time charter average recorded $8,230 on Thursday, down $527 day-on-day and down $518 since the start of the week.

Choppy waters for Panamax

It was not all gloom and doom for the Panamax as compared to the larger ships. There was a moment to shine for the Panamax paper market with some buyers returning in the week.

There was some support down the curve despite few trades seen in Asia and Europe. As such, the Panamax time charter average registered a gain of $67 day-on-day to $4,506 on Thursday and up $71 from Monday’s average.

Late support for smaller vessels

With the selloff in Capesize market, the Supramax paper market managed to overcome some early selling pressures and stabilized as the week ended. Overall, the Supramax market remained well supported with some competitive offers despite a quiet Lunar New Year market.

By Thursday, the Supramax time charter average witnessed some index bid support and recorded in green at $4,840, up $3 day-on-day, while the Handysize time charter suffered a drop of $70 day-on-day to $4,198.