| Although China consumes about 18 Capesize-loads of iron ore per day, the supply of ships is such that the demand is insufficient to create profitable freight rates, said London-based shipbroker ICAP Shipping. ICAP Shipping said, "The sharp drop of the iron ore prices has benefited the profit and loss of the local steel mills. Despite the pollution-curbing policies and the over-capacity issues in China's steel industry, the country's crude steel production pace is still drifting around high levels. If we assume China's daily crude steel production currently stands at 2.2 million tonnes, it means the country consumes 3.3 million tonnes of iron ore per day (around 18 Capesize cargoes)." However, Capesize timecharter rates are still languishing at over USD4,100 per day even after the week-long Lunar New Year holidays. A newbuilding spree that occurred in late 2013, when freight rates rallied, means that 150 Capesizes will be delivered this year, adding to the active fleet of 1,645 ships, based on IHS Maritime's Sea-web.com data. ICAP Shipping concluded, "At the moment, we can see that although there're many iron ore cargoes to be fixed, the supply of Capesizes in the Pacific is way too much to support a significant increase in Capesize rates." |