Iron ore rebound and China's stimulus update

[00:00:00] This week on FreightUp, the US government's got its purse strings open and looking to shore up

[00:00:04] its oil reserves. What does this mean for the oil market? RT Smith has got the latest news for you.

[00:00:10] In iron ore news, we've seen a 24% rebound since early August. But can this trend last?

[00:00:18] We've got how it pays hot take just for you. All this and more on FreightUp.

[00:01:27] The front few charges, Jan 24 contracts settled 82.47 last night. Initially in the APEC session, we were trading slightly higher than that and some finally positive Chinese economic data.

[00:01:34] It was better than expected on our factory data and retail sales data and anything that involves

[00:01:43] either a lifting of the US or Chinese It also weakens the dollar and when the dollar weakens holders of foreign currency have more buying power and oil So therefore it kind of got bought up to around 84 dollars for barrel. That was the intraday high yesterday We have definitely slipped since then but there was you know of rallying signs yesterday to a certain extent

[00:03:04] Over the course of this year earlier this year

[00:04:04] large. Yeah, exactly. Yes. And support there from the US government buying back their SPR.

[00:04:12] That would predominantly be a lot of the sour crudes from OPEC, which kind of plays into

[00:04:18] another point that I wanted to speak about regarding the fuel market. We're seeing,

[00:04:22] you know, very low self-fulfuelloyals been pretty stable recently.

[00:07:01] Cracks were slipping a little bit this morning, about 50 cents off in the front and therefore that's granting a lot of support to this high sulfur fuel oil market, which in turn tightens the high fives back up. We saw kind of last month, they started to widen again with support for the low sulfur and the high sulfur stuff getting a bit weaker high sulfur cracks are pushing. That could start to tighten should Saudi Arabia and Russia decide to continue to roll their output cuts further into 2024. Because it will be high sulfur that is mostly affected by that. You know, high sulfur crudes,

[00:07:03] naturally the high sulfur fuel

[00:07:04] is mostly affected by that.

[00:08:05] I've seen the spreads quite well offered in the market and that's the time spread. So your deck versus Jan

[00:08:07] Yeah, your Jan versus Feb

[00:08:15] Seeing those getting sold off for the very low sulfur fuel law on a set point which may well ease some of the

[00:08:20] Middle distillate markets and the product markets is a few months ago

[00:08:23] Russia placed a diesel export ban They have been gradually lifting some of these bands

[00:09:22] in both the Panamax and Supermax segments. Now to focus on the CAPES,

[00:09:24] there are on a notably positive no,

[00:09:27] buoyed by both existing fixing rates

[00:09:30] and a confident outlook in short-term Chinese iron ore demand.

[00:09:34] But there is a bit of complexity there.

[00:09:37] In spite of subdued volumes,

[00:09:38] CAPE iron ore shipments saw a notable buildup

[00:09:41] of vessels awaiting loading in Australia

[00:09:44] and increased cargo reports to $16,750 and $16,800 in size. Moving on to the Panamax, the rates experienced a gradual strengthening last week propelled by a

[00:11:02] recovering grain shipment market and an upswing in the Cape market.

[00:12:08] Q1 pushed up to $9,150, while further out, Cal24 traded inside $10,800 and $10,900. Overall, the week closed with some good bid support.

[00:12:11] So let's start to the week this week with Singapore holidays affecting liquidity in the market.

[00:12:16] December traded in good size from $12,400 to $12,550, and the Q1 printed up to $10,150

[00:12:25] before seeing selling interest again.

[00:13:30] market indexes are concerned, Cape Size 5TC is still king with a 12.4% growth from 19,234 last Monday, November 6th to 21,619 this Monday, November 13th.

[00:13:36] Panamax 4TC was not that far off with a growth of 7.7% from 11,693 last Monday to 12,598 have kind of led up to this moment and allowed this rebound to happen. How? I think first of all, in particular in August and September, the core micro change with that, the China house stimulus and results out for expectation of the If it stopped for a week or two, I bet it will draw for certain percentages, but it doesn't happen. It's just the one after another. So I think those are major reasons. So to push Iron Ore index really high,

[00:16:22] 24% of the last three months.

[00:16:25] Given all that, do you think that this trend's going the short one or we'll say it's the shortest one compared with other two kinds of factors. This is what I'm saying for November, which could be not sustainable. But if we look back into fundamental side, we're seeing a slight decrease on the supply, but much faster decrease on the demand side. the growth of iron ore usage in the last quarter. And I think one more factor on the delivery side is for the first three. See how it looks as the winter's coming. So the stills cells, they have to go from northern areas to south, the stills in the

[00:20:23] southern areas.