Capesize freight share in IODEX hits five-year low on excess tonnage, limited mineral supply
The Capesize freight rate as a percentage of the seaborne iron ore price has touched a record low, with a supply crunch for the mineral along with excess tonnage availability altering the correlation.
The share of the key Brazil to China Capesize freight rate in the benchmark S&P Global Platts IODEX 62% Fe CFR China index fell below 8% for the week ended Dec. 12 compared with the five-year average of about 20%.
A strong iron ore market has not really helped perk up Capesize freight rates. The Platts IODEX 62% CFR price has averaged $127.62/dmt in the fourth quarter compared with a year-to-date average of $106.38/dmt.