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.