The restart of the Brazilian mine has offset an earlier supply concern from fellow miner, BHP which reduces its shipment by 8m tonnes, due to supply disruption from Cyclone Veronica.
Capesize paper market reacted positively to the mine restart with Capesize 5 time charter average recorded $6,209 on Wednesday, 17 Apr 2019, up $218 day-on-day and up $304 from Monday’s rate at $5,905.
Bad weather to impact Brazilian shipment
Despite the supply easing, some trade participants were concerned over adverse weather experienced in March and April that affected shipment from Ponta da Madeira port in Brazil.
The delays in the port may also impacted production volumes in the Vale’s Northern System, but the miner maintained its annual sales guidance for its iron and pellet at 307-332 million mt.
Fresh cargoes from Australia and Colombia
The Capesize market also expects more fresh cargoes out of Western Australia to boost the Western Australia to Qingdao route.
As the Western Australian miners are estimated to push up shipping volume toward the end of the financial year, which might support freight rates in the near term.
Similarly, fresh cargoes from Colombia lend some support to the physical market in evident of the modest increase of Colombian coal from Puerto Bolivar to China.
The good demand of Colombian coal may lie in their competitive pricing which made them cheaper than the Australian coal. However, some trade sources highlighted that the robust demand to be temporary as Colombian coal lacks the quality content as compared to their Australian counterpart and so far, only a small percentage of Colombian coal was shipped to China.