Rates for Iron Ore Carriers Set to Increase

Ships will be in high demand for carrying iron ore based on the latest announcements from industry players.

Australia and Brazil seem to be gearing up to bolster their export iron ore tonnage which will see shipping costs surge this year, by 80 pct, reports Bloomberg.

Clarkson Plc estimates that Australian mining giants will ship an extra 97.8 million metric tons from Australia, which equals to over 600 Capesize carrier cargoes.

Seaborne supply of this precious cargo on a global scale is expected to top 1.3 billion metric tons in 2014 for the first time ever, as explained by Morgan Stanley.

As a result, Capesize owners may be in for smooth sailing in the next half of the year, as freight rates are expected to tick up.

“Capesizes will earn $12,250 a day this quarter, rising to $21,250 in the final three months of the year,” according to data from Clarkson.

Brazilian miner Vale is already mulling fleet expansion to back its export objectives for China. However, as announced by Jose Carlos Martins, Vale’s head of ferrous metals, the company will prefer leasing tankers as opposed to purchasing units.

However, the increasing workload on towage workers has taken its toll, as workers clock up 18hour shifts at Australia’s largest port, Port Hedland.

Tugboat engineers are negotiating their terms for a standard 12h shift, with Teekay Shipping, however they haven’t ruled out completely the strike option.

In order for their terms to be met, Teekay would have to boost workforce at the port.

[mappress]
World Maritime News Staff, August 8, 2014