The Capesize market was hit by lower shipping activities due to European holidays this week and by fewer iron ore cargoes coming out of western Australia.
Outside of western Australia, the freight market was sluggish, with many trade participants expecting the Brazilian miner Vale to come out with more July shipment for rates to grow, but that did not happen this week.
Brucutu mine to restart
Despite the low activity from western Australia, the market is optimistic about Vale as the Brazilian miner expects to restart its Brucutu mine with capacity of 30 million mt production year in near term.
According to a trade source, the Brucutu mine has already produced 10 million mt per year through the dry-stacking process that did not use the tailing dam. The remaining 20 million mt is expected to restart over the next few days.
The restart, if finalized, might imply more cargoes from Brazil and the miner also pledge to increases iron ore shipments out of its S11D projects.
So far, the miner has reportedly fixed around 10 Capesize vessel over the past two weeks and any more vessels are welcomed by the market.
Oil tankers attacked at Gulf of Oman
The shipping market is increasingly concerned about the recent attacks on oil tankers in the Gulf of Oman and this prompted a hike in oil prices which have been bearish for some time.
Although the oil spike was little in the way of positive news in the physical shipping market on the run up to index, it seemed to lessen the decline in the Capesize paper freight rate.
By Thursday, 13 Jun 2019, the Capesize 5 time charter average recorded at $13,621, down $368 on-day, and down $1,247 since Monday.
Short work week
It was a short week for the European market due to the celebration of Whit Monday – the low volume then impacted the Panamax paper market, which had been declining since the start of week.
As such, the Panamax paper market slid to $9,135 on Thursday, down $101 on-day and down $398 since Monday’s rate at $9,533.
Likewise, the Supramax paper market suffered similar fate from the short European work week and the time charter average dipped by $12 on-day to $8,094 on Thursday. Meanwhile, the handysize market had no trades to report and the time charter average gained by $32 on-day to $6,269 on Thursday.