Dry bulk freight earnings gain on iron ore congestion and Pacific coal chartering

Iron Ore & Steel: Australian iron ore exports hit multi-year low due to Cyclone Zelia

• Global seaborne iron ore exports slumped to 18.55 Mt in the week ending 16 February, marking a sharp 35% drop against the five-year average of 28.53 Mt. The drop was driven by Australian shipments plunging to their lowest level since at least 2017, as major ports, including Hedland, Dampier, and Walcott, were forced to pause operations for three days due to the tropical Cyclone Zelia. Kpler data shows that over 130 iron ore vessels were waiting to be loaded at Western Australian ports by the end of last week, the worst congestion in four years.
• Rio Tinto, the world’s top iron ore producer, has estimated shipment losses of 13 Mt due to the cyclone-related disruptions. It aims to mitigate approximately half of these losses throughout the year. This aligns with our view that Q1 2025 shipments could hit a multi-year low. For now, the miner has upheld its 2025 guidance of 323-338 Mt but has stated that a full review will be conducted at the end of the quarter. We believe the lower end of the current annual guidance range (323 Mt) remains achievable, provided there is no further disruption.
• Meanwhile, Mineral Resources (MinRes), Australia’s fifth-largest iron ore exporter, has revised down its FY2025 Onslow shipment guidance from 10.50-11.70 Mt to 8.80-9.30 Mt, citing significant flooding that damaged sections of the Onslow Iron haul road. This marks yet another setback for the Onslow project following a truck crash in November, with Kpler data showing weekly shipments from the site have slowed since mid-January. As a result, MinRes now expects the project to reach its full 35 Mtpa capacity in Q1 FY2026 (ending September) rather than Q4 FY2025 (ending June) as initially scheduled.
• Iron ore prices have edged lower from last week’s multi-month highs as concerns over Australian supply disruptions ease, while renewed trade tensions—triggered by Trump’s latest tariff threats on autos—have weighed on sentiment. The SGX TSI Iron Ore CFR China (62% Fe Fines) fell 1.04% w/w to $106.69/t on 19 February, while the most active May 2025 contract on the DCE declined 1.21% w/w to 818 yuan/t ($112.31/t). We expect the SGX benchmark to hover around $105/t in the run-up to China’s annual “Two Sessions” in early March, with prices supported by fresh stimulus hopes. However, any disappointment in new policy measures could see the benchmark quickly retreat to the $100/t mark.

Australian iron ore exports plunged on Cyclone Zelia (Mt/week)

Source: Kpler

Coal: Lower prices weigh on mining revenues, coal becomes competitive against petcoke

• Seaborne metallurgical coal deliveries rose by 500,000t w/w to 4.5 Mt last week, mainly driven by high demand from Japan and South Korea, while deliveries to India and China edged lower w/w.
• Seaborne thermal coal imports rebounded to 16.8 Mt last week from a low base of 13.7 Mt the previous week, driven by a recovery in receipts from China and India.
• The world’s largest thermal coal producer, Glencore, announced that it made a loss in 2024 owing to weaker coal prices and one-off impairment adjustments to its balance sheet. The company ruled out any immediate production cuts to its thermal and metallurgical coal production. Glencore’s latest guidance suggests thermal coal production will remain steady at around 100Mt until 2028. Thermal coal production is projected to fall after 2028 however, the company has not ruled out cutting output if market conditions deteriorate further. The company plans to produce around 30-35 Mtpa of metallurgical coal in the coming years, which aligns with its previous production levels and output from its latest metallurgical coal acquisition EVR’s mining assets.
• Despite the recovery, China’s thermal coal receipts are on track to fall for the second consecutive month. Kpler data indicates aggregate receipts will be around 20-21 Mt, down from 23 Mt last year. Mining operations in China have restarted after the end of the spring festival, which should weigh on the need for imports, given that early indicators suggest that coal consumption from the power sector is lower than 2024 levels so far this year. Chinese metallurgical coal demand also faces headings. However, this is unlikely to have a significant impact on the seaborne market given Mongolia’s role as a supplier to China via rail route. Metallurgical coal stocks at the Ganqumaodu crossing are growing at a steep rate due to weak offtake.
• Indian buyers also increased their thermal coal intake last week, with receipts from Indonesia, South Africa and the US gaining by 300-500,000t w/w to take aggregate receipts to 3.5Mt. The increase in US receipts coincides with petcoke’s eroding competitiveness into the country, as some traders are offering distressed Northern Appalachian coal cargoes into India at lower rates than petcoke on an energy-adjusted basis. Imports from the US rose to 400,000t last week, the highest since late May 2024.

India thermal coal imports from US (Mt)

Source: Kpler

• In Japan, the need for thermal generation is likely to fall further as Kansai Electric Power is planning to restart the 1,180MW Ohi No. 4 nuclear reactor for a test generation on February 22, after the maintenance work on the No. 4 reactor began on December 14, 2024. This is ahead of the scheduled completion of regular maintenance work on March 19th. But the recent cold snap in the country is likely to have increased power demand and coal burn. Weekly thermal coal deliveries gained by 700,000t w/w to 2.6 Mt.
• Turkish coal deliveries edged lower last week after a significant increase in the country’s thermal coal intake in January. Weekly coal receipts rose to 1.4 Mt in the last week of January as utilities have built stocks ahead of the expected cold snap in February. Some 800,000t was imported last week after imports fell below 400,000t during the first week of the month. Similar to India, coal regained its competitiveness against petcoke in Turkey, which will drive demand for coal from cement sector buyers in the coming weeks. Russian coal is nearly priced at parity with US-origin petcoke at the time of the report. Cement makers typically expect a 10-15% discount for petcoke to deem it competitive.
• Coal deliveries to ARA remain weak, with only one Panamax cargo of US coal delivered to the ARA transhipment hub last week. Deliveries will recover in the coming weeks to exceed 300-400,000t, but further upside is unlikely with the end of the winter season approaching.
• On the supply side, heavy rainfall in some key US mining areas might cause shipment delays. Mining areas in the Illinois basin and Central Appalachian coal have been hit by heavy rainfall that disrupted mining operations. However, given the abundance of coal supply in the Atlantic and Pacific basin, this is not expected to impact prices significantly.

Grains & Oilseeds: Rains in Brazil ease while winterkill threat for US and Russian wheat persists

• Last week, the Buenos Aires Grain Exchange reduced the percentage of corn and soybean crops that are in good or excellent condition; the sixth consecutive week for corn and the ninth for soybeans. As of week eight of 2025, only 15% of either crop was in good or excellent condition. Harvesting of the corn crop has begun in fields where the development of the crop was accelerated due to the higher temperatures and lower soil moisture, with yield reductions seen; the soybean harvest has yet to start.

Argentine corn and soybean crops in good or excellent conditions (%)

Source: Buenos Aires Grain Exchange

• The Brazilian soybean harvest, as well as the safrinha corn planting, has returned in line with the previous three years following a break in rainfall. Exports should soar seasonally as vessels line-up to export soybeans out of Brazil. CONAB lowered soybean production slightly to 166.0 Mt whereas most analysts are higher, including Kpler at 169.1 Mt.
• Wheat markets were lower in the last two trading sessions as the weather improved in both the US plains and Russian wheat regions. While forecast temperatures are less low than before, large wheat areas in Russia are still at risk of winterkill. However, in the absence of winterkill, wheat prices do not have much support from fundamentals. Northern hemisphere spring rainfall in April and May will be the next determining factor for wheat production.
• Russia’s wheat export quota of 10.6 Mt is now in effect and is due to last until the end of June while Ukraine has exported over 70% of its 16.2 Mt wheat export quota, also due to end in June. The slowdown of Black Sea exports could improve the opportunity for EU nations to find demand in the second half of the marketing year to MENA destinations after a sluggish pace in the first half.

EU-27 wheat exports (Mt)

Source: Kpler

Minor Bulks: Alumina prices stabilise?

• Global seaborne bauxite exports totalled 3.49 Mt in the week ending 16 February. In Guinea, shipments fell to 2.50 Mt—the lowest in two months and below the 2.97 Mt average recorded so far this dry season (November to April). While unresolved disputes between Guinea Aluminium Corporation (GAC) and local authorities and political instability have posed challenges, shipments could regain momentum through the rest of the dry season as new projects come online and existing operations expand. A key development came on 10 February when Wenfeng Industrial Group’s GIC II project (nameplate capacity: 10 Mtpa) completed its first shipment, loading 0.17 Mt onto a Capesize vessel destined for Caofeidian, China.
• Alumina prices have stabilised following weeks of sharp declines. The most-traded May 2025 contract on the SHFE edged up 0.92% w/w to 3,418 yuan/t ($469.29/t) on 19 February, as reports suggest that some Chinese refineries have begun maintenance work in response to tightening margins. However, with new alumina capacity coming online across Asia and Australian exports normalising, prices will likely remain under pressure in the coming quarters.

Global seaborne bauxite exports (Mt)

Source: Kpler

Dry Bulk Freight: Earnings gain, but can they sustain?

• The dry bulk freight market is showing signs of recovery with improving fundamentals and sentiment.
• A spike in the number of Capesize vessels (99k+ dwt) waiting to load iron ore at Australia’s Port Hedland, Dampier, and Port Walcott is tying up tonnage and providing short-term support to earnings. The Capesize 5TC average rose by $1,703/day w/w to $7,603/day on 20 February. Signs of recovery in the physical market are reflected in Capesize FFAs which strengthened.
• At 35 Mt in February to date, iron ore liftings at Australian ports need to accelerate to compensate for export volumes lost following seasonal weather disruptions. An upturn in iron ore chartering activity is possible in the coming weeks as miners strive to meet their quarterly export targets.
• Iron ore port congestion contrasts with a reduction in congestion at East Coast Australian coal load ports, where shipments are getting back on track following an easing in seasonal rains. Pacific coal chartering has picked up since the end of the Lunar New Year holidays, supporting a firming in earnings on Pacific coal routes. The Panamax P5 (South China-Indonesia round-voyage) is up by $3,350/day w/w at $10,044/day, while Indonesia-China and Indonesia-India Supramax earnings also increased. This is against the backdrop of seasonally higher Australian grain exports adding to Panamax/Kamsarmax and geared bulker demand.
• Severe winter weather along the US East Coast is disrupting coal loadings from coal terminals in the Hampton Roads area. Lamberts Point coal terminal has not loaded a vessel since 17 February. At almost 13 Mt, Lamberts Point handled more metallurgical coal than any other US export installation last year.

Pacific coal rates pick up as chartering activity returns ($/day)

Source: Baltic Exchange

Key Dry Bulk Market Developments

Source: Kpler

Dry Bulk Port Congestion

Source: Kpler

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