The most significant facet that struck the dry sector is the Tailings dam collapse in Brazil.
Vale typically charters Capesize (170,000DWT) and Very Large Ore Carriers (380,000-400,000 DWT), mainly characterized by bulkers on long-haul, high volume voyages transporting iron ore from Brazil to China (>75-80 days) - almost thrice the Australia - China route (32-35 days).
Closed mining operations and a reduction of approximately 70 MMT of iron ore exports from Brazil to China sent Capesize rates plummeting in the first half of 2019.
With some iron ore exports back on track, the Atlantic Basic was faced with reduced Capesize vessels availability, spiking rates temporarily from May’19 through September’19. Rising Capesize rates had a momentary domino effect on Panamax rates which shippers used to split cargos during Capesize supply disruptions.
Even though Vale initially estimated it would sell 307 million-322 million tons of iron ore and pellets in 2019, on November 11, it redacted the outlook to 307 million-312 million tons, abetting its dampening contagion effect on the Capesize market.
Ultimately, Vale’s year-end iron ore production doesn’t seem to offer the much-needed solace that would heal the wounds of the Capesize market.
Nonetheless, Vale production figures are estimated at 340-355 million tons in 2020; followed by 375-395 million tons in 2021; going up to 390-400 million tons 2022 onwards.
A second crucial turning point for dry bulk appeared as China’s attempt to reduce thermal coal imports carried by both Capesize and Panamax (75,000-83,000DWT).
Beijing’s restriction of 280 mt of import was exceeded in 2018, it is anticipated that the end of 2019 will witness severe reductions in thermal coal imports.
Bu hikaye Coal Insights dergisinin December 2019 sayısından alınmıştır.
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Bu hikaye Coal Insights dergisinin December 2019 sayısından alınmıştır.
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