Now is a good time for owners of supramax bulk carriers, for which spot rates have reached some of the highest levels seen since 2008. Day rates as high as $40,000 and even $60,000 are being heard in certain pockets of the market around the world. Baltic Exchange panelists assessed the average supramax spot rate, which is weighted across 10 benchmark routes, $158 higher on Wednesday at $32,817 per day.

The assessment has never been this high using its current methodology, which was brought in six years ago. Going back even further, this new level would appear to be highest assessment since mid-September 2008, based on the outdated methodology. That said, it was a quiet day for reported fixtures on Wednesday and only two new spot deals for supramax and ultramax vessels came to light. An unnamed charterer reportedly fixed Chelleram Shipping’s 61,087-dwt ultramax Darya Mira (built 2021) for a trip from Jakarta to Singapore/Japan via South Africa from 11 August at a daily rate of $38,500.

Lack of tonnage and strong demand in the India to Middle East Gulf range has led to day rates of above $38,000 for vessels fixing for trips from southeast Asia via South Africa, according to a report on Wednesday by Fearnresearch, the research arm of Norwegian shipbroker Fearnleys. Why have spot rates got to such high levels? Strong demand for the vessels across the board, according to Fearnresearch.

Grain cargoes from eastern Europe are still coming thick and fast, which is supporting vessel demand in the region and pushing rates to almost double Wednesday’s Baltic assessment. The Black Sea market is “still very active“, Fearnresearch said. Fronthaul trips from the region are currently paying anything from $55,000 to $60,000 per day, depending on the specific vessel’s position and specification, the firm said in its report.

“The Continent and Mediterranean market are well supported with lots of resistance from owners to go to West Africa due to the recent pirate attacks,” the report said. Supramaxes heading to the Mediterranean can expect to earn around $35,000 per day and day rates in the high $40,000-per-day range for trips to the East, the firm added.

Activity is waking up in the US Gulf market and rates there are stable, according to the report. Rates for transatlantic round voyages are fixing in the low $30,000-per-day range, while ultramaxes are being booked at north of this level. Supramax and ultramax bulkers are meanwhile achieving rates in the mid- to high $40,000-per-day range for trips to the East from the US Gulf.

The market for east coast South America has also been firming since the end of last week, although little new information has come to light, Fearnresearch said. One ultramax was rumored to have been fixed on subjects for a trip from the region to the Far East for $30,000 per day, plus a $1.6m gross ballast bonus, Fearnleys added.

Meanwhile, Fearnleys described the Pacific market as “stable”, but a fixture on Wednesday was reported at a lower rate than previous deals. Almi Marine Management of Greece was said to have fixed its 57,260-dwt supramax Kibali (built 2011) to an unnamed charterer for a prompt round-trip from China via Indonesia at $25,500 per day, according to fixtures reports on Wednesday.

This week is set to be a gauge of how far dry-bulk shipping has benefitted from the commodity boom as some of the world’s biggest public bulker owners reveal their earnings for the second quarter. Mining companies — major charterers of bulk carriers — are already reporting blockbuster profits on the back of strong iron ore prices, which soared last quarter, and are paying out billions in dividends to shareholders. Some of this strength looks set to be reflected in bulker companies’ bottom lines and distributions to investors for the second quarter.

Analysts expect seven major US-listed bulker companies to clock up combined revenue of $954m for the three-month period, which could translate to total net profit of $423m, according to consensus estimates. The companies are Diana Shipping; Genco Shipping & Trading, Eagle Bulk Shipping, Star Bulk Carriers, Golden Ocean Group, Navios Maritime Partners and SFL Corp. These companies could together pay out close to $115m in dividends for the second quarter if analysts’ expectations are met. “Clearly all of them can pay large dividends, the question is will they pay large dividends now, or wait for more visibility and even stronger balance sheets in subsequent quarters?” commented Randy Giveans, senior vice-president of equity research for investment bank Jefferies.

Already, there are positive early signs of what lies ahead this earnings season. Diana Shipping has just reported its first profitable quarter in almost two years, though it did not declare a dividend. Oslo-quoted bulker owner GoodBulk, the public arm of pooling giant C Transport Maritime, last week reported its strongest ever quarterly profit and declared a dividend of $1 per share, around three times more than its previous pay-out. Elsewhere in the world, Hong Kong-based Pacific Basin Shipping last week announced its best first-half profit in 13 years, which allowed it to resume its dividend and pay out HKD 14 cents ($0.018) per share for the six-month period.

Giveans expects stronger results from bulker companies for the second quarter but said the “real meaningful jump” will be in the third quarter. “As a result, although Q2 will be important, I believe the Q3 [to date] rate guidance will be even more important as it will show if owners are/are not capturing the strong rates that brokers are reporting,” he told TradeWinds. Giveans said he expects to see higher payouts to shareholders from companies with floating dividends based on earnings or cash flow. “However, for those without dividends or those with fixed dividends, I do not expect increases (yet) as many owners remain focused on debt repayment, asset acquisitions, and building cash balances, especially with the ongoing ‘market uncertainty’ (which is always the case, but even more so in these Covid times),” he explained. “That said, I do expect those with big dividend payments, or large share repurchases (which I am a big fan of), to outperform those companies who remain focused on hoarding cash or buying ships (especially newbuildings that won’t be delivered for two to four years).” Eagle Bulk, like Diana, is among the few US-listed bulker owners that analysts do not expect will declare a dividend to shareholders for the second quarter. Star Bulk Carriers looks set to declare the biggest dividend, with analysts expecting a $0.43 per share pay-out for the period, according to the consensus estimates. This would see the Greek owner paying out close to $44m to investors if the target is matched. Eagle Bulk looks to be the big winner in terms of earnings per share for the second quarter — analysts expect the company to book EPS of $3.09.

Booming commodities markets this year have resulted in a bumper earnings season for major miners — particularly producers of iron ore, for which Chinese demand has been insatiable and supply has been constrained. Rio Tinto Group, the world’s biggest iron ore producer, last week announced its highest-ever interim profit and said it will pay $9.1bn in dividends. The average realised free-onboard price for iron ore almost doubled year on year to $168.40 per tonne during the first half of 2021, according to Rio Tinto. This helped boost the miner’s underlying earnings to $12.17bn for the first half, up from $4.75bn a year earlier. Vale, which is jostling for position as the world’s top iron-ore miner, last week reported second-quarter net profit of $7.59bn, up by 600% from the same period a year ago.

Congestion in China jumps as restrictions imposed

• Bulk carrier congestion in China hit a 5-year high of 50.5m dwt over the weekend, rising by 24% YoY as new restrictions were put in place in ports across the country.
• Current queues are 76% above the 5-year average as COVID-19-related protocols affect all sectors of the dry bulk market.
• More specifically, queues of laden Capesizes in China increased by 166% WoW to 15.6m dwt, though this partially reflects a low base last week when vessels were cleared from anchorages due to bad weather.
• At the same time, Panamax congestion remains supported by a lack of grain storage capacity in Chinese ports. China-bound vessels carrying grain are reportedly facing waiting times of several weeks to discharge.
• Newly reported positive Covid-19 cases in China have recently forced the country to re-introduce restrictions to curb the spread of the virus.
• Most ports in the country are now requiring a nucleic acid test (NAT) for all crew mates, with vessels forced to remain at anchor until negative results are confirmed.
• Many ports in the country are also requiring vessels to quarantine for 14-28 days if they previously berthed in India or performed a crew change within 14 days of arriving in China.
• While it is unclear how long these measures will be in place for, they will likely tighten the dry market in the near-term.

China curbs fertilizer exports

• The Chinese government has reportedly told the country’s major fertilizer producers to suspend exports of the material as prices of phosphates and urea continue to soar.
• This is one of many actions the country has taken in 2021 to stabilize commodity prices and reduce input costs for agriculture and other industries.
• Chinese fertilizer exports totaled 1m tonnes in July, decreasing by 43% YoY. Over the first half of the year, Chinese fertilizer exports accounted for around 12% of seaborne supply.
• Severe flooding in some regions in recent weeks has also affected supplies in the country, sending prices higher for farmers.
• Following record imports of various crops in 2021 to bolster food reserves, the country has sought to expand its domestic production to lower its reliance on seaborne produce.
• Of the 1m tonnes loaded in July, 300k tonnes went to Brazil, a potentially lucrative backhaul route for owners of geared tonnage.
• Meanwhile, other major buyers such as India and Pakistan will now need to look elsewhere for supplies, which may have to come from more distant suppliers such as Russia or Morocco.  

Iron ore market spooked by Chinese regulations, supply prospects from Brazil

• Benchmark 62% Fe content iron ore prices fell by 15% WoW on Friday to $185.0 per tonne, the largest WoW drop since May, before stabilizing at $185.5 per tonne today.
• Today’s prices still represent a 65% improvement versus a year ago and the premium of higher-grade 65% Fe content remains at record highs of over $30 per tonne.
• Recent announcements by Chinese authorities have likely put a dent in sentiment – export tariffs were raised last week, which could take the heat out of external demand for Chinese steel products. This source of demand has been a key driver of elevated production, and thus iron ore imports, in China.
• Meanwhile, despite another weak month for Brazilian iron ore shipments in July, many are expecting improved volumes over August, helping to address the deficit in the market.
• On the periphery, other issues may also be weighing on prices. A recent spate of COVID-19 cases in China, weaker manufacturing activity have eroded confidence in China’s steel sector, while the country’s domestic iron ore output has been gradually increasing for the last few months, rising 12% YoY in June to 87.9m tonnes.

Stronger bulker markets have helped Diana Shipping to beat analysts’ estimates and record its first profit in seven consecutive quarters. The New York-listed bulker owner reported net income of $2.8m for the period, of which $1.4m was attributable to common stockholders. The last time Diana recorded a quarterly profit was for the third quarter of 2019. Diana booked a $12.2m loss attributable to shareholders during the same period last year, including a $2.6m impairment loss.

The bulker owner’s net result beat analysts’ expectations for the period by $400,000 and its revenue exceeded consensus estimates too. Time-charter revenue totaled $47m for the second quarter, compared to $41m in the same three months last year. Analysts had expected revenue to total $45.7m. “The increase in time-charter revenues was mainly due to increased average time-charter rates that the company achieved for its vessels during the quarter,” Diana Shipping said in its second-quarter report on Tuesday.

But Diana added that the rise was partly offset by lower revenues due to decreased ownership days compared to last year, resulting from the sale of vessels. The Greek shipowner’s fleet comprised 37 bulkers on average during the second quarter this year, down from 41 in the same three months in 2020. The shipowner did not declare a dividend.

The positive second quarter means that Diana Shipping has finished the first half of 2021 in better shape than last year. Net loss attributed to common stockholders amounted to $1.4m.

Last year, Diana booked a net loss of $116.5m attributed to common stockholders, which included a $95.7m impairment charge and a $1.1m loss from the sale of vessels.

AP Moller-Maersk has revised its full-year guidance for 2021 upwards, with its underlying Ebitda now expected in the range of $18bn to $19.5bn. Earlier guidance from the Danish liner giant had predicted Ebitda for 2021 would come in at $13bn to $15bn.

The company said it had made the revision after a strong second-quarter performance that was mainly driven by the “continuation of the exceptional market situation with strong rebound in demand causing bottlenecks in the supply chains and equipment shortage”. On Tuesday, AP Moller-Maersk revealed unaudited revenue of $14.2bn for the quarter, and an underlying Ebitda of $5.1bn. Volumes increased by 15% and average freight rates improved 59% as compared with the same period in 2020.

The company said it had revised its full-year guidance upwards “given the strong result in Q2 2021 and the exceptional market situation still expected to continue at least until the end of the full-year 2021. The outlook for the global market demand growth for the full-year 2021 has been revised up to 6% to 8% from previously 5% to 7%, primarily still driven by the export volumes out of China to the US. Earnings in the third quarter are expected to exceed the level for Q2 2021. Trading conditions for the quarters ahead are, however, still subject to a higher-than-normal volatility due to the temporary nature of current demand patterns, disruptions in the supply chains and equipment shortages.”

HSBC Global Research said AP Moller-Maersk’s revised guidance was not surprising given the profit guidance issued by several its peers in the past few weeks. Parash Jain, head of shipping and ports and Asia transport research at HSBC, described the guidance as conservative. “We still see room for one more earnings upgrade to 2021 earnings as visibility on the fourth quarter improves,” Jain said in a research note. “Evergreen, in its recently concluded AGM opined that the fourth quarter could be as strong as third quarter if port congestion persists.”

Because of the higher earnings expectations, AP Moller-Maersk said that despite increasing net working capital and higher instalments related to higher charter lease liabilities, its free cash flow for the full-year 2021 was now expected to be a minimum of $11.5bn, up from $7bn, while its cumulative capex [capital expenditure] guidance for 2021/2022 remained unchanged at around $7bn. The company will publish its second-quarter interim results on 6 August.

Congestion at ports around the world has eased slightly but not as much as had been hoped and is still an everyday reality for the global dry bulk fleet. Bulker tracking platform Oceanbolt has identified that 26% of the world’s bulk carriers of 27,000 dwt and over are caught in queues at ports worldwide. Around a quarter of all capesize bulkers are being affected by congestion, comprising “baby capes” of 110,000 dwt up to VLOCs of more than 250,000 dwt, according to Oceanbolt, which leverages both AIS and satellite data.

Analysts had expected capesize congestion in the Atlantic to unwind this month as Brazil upped its iron ore exports. But July’s numbers have disappointed, according to Nick Ristic, lead dry bulk analyst at Braemar ACM Shipbroking. “The mythical ‘Brazil ramp-up’ still hasn’t quite materialized,” Ristic told TradeWinds. “Shipments are on trend for about 32m tonnes, which is up 2% [month on month] but 9% lower than we had expected at the start of the month.” He added that mine maintenance in northern Brazil and possible licensing issues have affected output.

Capesize tonnage in the Atlantic has thinned out slightly but congestion is still there. Congestion at Brazilian ports built up during the second quarter to the highest levels since 2019 but eased as the country ramped up its exports of dry commodities. Queues of ships larger than 100,000 dwt peaked at 16.7m dwt in May but had fallen to 9.6m dwt by mid-July, according to analysis by Braemar. With all that in mind, Ristic said Australia is “back in the driving seat”, which is being reflected in spot rates. Last week, the Western Australia-to-China benchmark route for capesize iron-ore voyages was commanding a $9,000-per-day premium over trips to the country from Brazil in time-charter equivalent terms, “although all the recent maintenance there means that shipments are still on trend to fall by around 7% [month on month],” Ristic noted.

Data from Oceanbolt identifies 43 bulkers of 110,000 dwt and over — totaling 10.7m dwt— currently affected by congestion in Brazil. This is 2.5m dwt more than Friday as ballasting vessels arrive in the region — but Ristic told TradeWinds that traffic heading towards Brazil is “relatively low”. Vale’s iron-ore export facility in Ponta da Madeira in Brazil had a queue of 29 capesizes of 110,000 dwt and over, as of Monday. Major load ports for capesize bulkers are among the world’s most congested, according to Oceanbolt.

In Australia, a combined 46 vessels are queuing at major coal port Newcastle and ore terminals at Port Hedland. Average waiting times at ports around the world are falling for capesize vessels. The average fell slightly to 7.1days on Monday, down from 7.8 days of queuing a week earlier, according to the data. Just under half of all the congested vessels identified by Oceanbolt are in ballast.

Oceanbolt data identifies 2,861 bulkers caught in congestion worldwide, equivalent to around 26% of the live fleet of vessels over 27,000 dwt. Shanghai is worst affected, with 165 bulkers caught in queues at the Chinese port, the data shows. The next most congested ports are Ningbo and Rizhao in China, where a combined 166 bulkers are caught in congestion. Bulkers carrying coal are the most congested by the commodity, with 35.6m dwt in tonnage or 444 vessels waiting at anchor currently. Congestion is affecting around 32.1m dwt of bulkers laden with iron ore, numbering 192 ships on Monday, which is down only slightly on a week ago.

July has seen a noticeable slowdown in the average speed of the global bulker fleet, which is beginning to accelerate once again, according to Oceanbolt data. Ballasting capesizes were sailing as slow as 11.3 knots during the last week of July but have since sped up to 11.6 knots as of Monday, the data shows. This is 0.2 knots faster than laden vessels, according to the data. The global fleet, comprising all bulkers of at least 27,000 dwt, slowed to 11.4 knots in late July, but has since sped up to 11.7 knots.

Ballasting vessels are currently sailing at 11.8 knots on average.

Smaller bulk carriers are continuing to gain momentum as strong demand for commodities and fleet inefficiencies lead to tonnage tightness. The average weighted supramax time charter on the Baltic Exchange edged up to $32,395 per day at the close on July 30, a gain of 5% from the week before, while handysizes inched up 3.1% to $31,676 per day. Both segments outperformed the panamax market, which slid below $30,000 for the first time since June 11, closing at $29,734 per day, while a sudden leap in capesizes saw earnings hit $35,713 per day.

An operator in Hong Kong said that that China was back with plenty of cargo demand for different minor bulks, which has been supporting freight rates for the Pacific region. Coal cargoes from Indonesia to China remained attractive, although due to the recent covid lockdowns, some disruptions were seen.

The Black Sea and Mediterranean regions were “full of life” with a lot of inquiries from the market, but the major concern now was the reduction in available tonnage. East Coast South America was also “on fire, with huge demand” for both supras and handies, with vessels being fixed at rates as per the destination. “It is one of the reasons why charterers are ready to pay more money to get the fixture done as soon as possible,” he said.

The Baltic Exchange said it was “a week of positive gains as sentiment remained strong in many areas, although it was a gentler push”. Demand from the Mediterranean kept rates solid, with an ultramax said to be fixed from Turkey to Nigeria via the Black Sea at the $50,000 per day mark. Most other fixtures were in the $30,000-$40,000 per day range.

A broker said that with container port congestion becoming more of an issue, several dry cargoes, namely agri-products, which would be carried in boxes were again being carried by handies, especially for Chinese port deliveries. In addition, building construction material demand was very strong globally, as countries increased spending in a post-Covid recovery phase.

According to brokerage Braemar ACM, fleet inefficiencies caused by the pandemic such as quarantine requirements and diversions for crew changes boosted freight rates. A key driver for the supramax market has been steel trades, which has benefited from regional imbalances, it said in a recent note. But the unwinding of these effects could be a risk for freight further out.  The brokerage expects China’s steel production growth to slow to 8.7% in the last six months of the year compared with 11.5% growth in January to June. The total output gain of 10% in 2021 could be slashed to 3% growth next year as the economy cools and steel intensity starts to decline, it said, adding that further easing could continue in 2023.

Excluding China, where output grew by 17% in the first six months of the year compared with the year-earlier period, the recovery should continue, albeit at a slower pace, with production rising by 7.2% over July-December, according to Braemar. A pullback of 0.2% is expected in 2022 from overall growth of 12% this year.

Coal trade is meanwhile expected to increase by 10% in the latter six months of 2021 after 3.6% growth to 673m tonnes in January-June, Braemar estimates, bringing the total year rise to 6.7%, as the reopening of economies required more electricity generation, while a general surge in energy prices was making coal more competitive. Braemar, which has a general positive outlook for the dry bulk market, is expecting a swift recovery in trade in 2021. After falling by 3.1% in 2020, minor bulk trade surged by 11.5% over the last six months, with estimated volumes to rise by 10% over the remainder of the year, helping to keep rates for the geared ships at strong levels, it said.

China is increasingly looking to countries such as India, Canada and even Peru as it attempts to wean itself of iron ore supplies from Australia. The country remains by far the largest importer of iron ore in the world, accounting for a massive 68% of the global seaborne iron ore trade. In the first six months of this year China imported 537.8m tonnes of iron ore, up 2.1% year-on-year.

Total global loadings were up 3.3% year-on-year to 761.4m tonnes, according to vessel tracking data from Refinitiv. Australia is still the top iron ore exporter to China by a long way, despite all the politics. “One can say that it’s just because there is no alternative, even though China is clearly trying,” said Banchero Costa head of research Ralph Leszczynski.

Imports to China from Australia declined by 2.2% year-on-year to 356m tonnes in the first six months of 2021. Australia now accounts for 66.2% of China’s iron ore imports. Brazil remains China’s second largest source of iron, with a market share of around 20.6% share. Shipments from Brazil to China increased by 18.4% year-on-year to 110.5m tonnes in the first half of this year versus the 93.3m tonnes seen in the same period of 2020.

However, volumes from other nations have made sizeable gains in the first half of this year, according to figures from Banchero Costa. India saw volumes of iron ore shipped to China surge by 63.6% year-on-year to 11.2m tonnes. Meanwhile, imports from Peru were up 21.6% year-on-year to 11.1m tonnes, while those from Canada increased by 45% to 8.6m tonnes. All good news for bulker tonne mile demand.

South Africa is the third largest exporter in the world after Australia and Brazil, but it’s far behind those two, at just 55m tonnes per year of which about 63% goes to China. The rest of Africa, once anticipated as a major new source of supply of iron ore for China, has failed to live up to that billing. “There are fairly modest volumes from Liberia, about 5m tonnes per year, and Sierra Leone, about 2 or 3m tonnes per year. Guinea used to export, but that was down to zero last year,” said Leszczynski.

“There have been plenty of ‘projects’ in West Africa, but the mines are deep inland far from the coast, there are big logistical challenges to bring the ore to the ports by railway, and then draft issues at the ports. Hence very high breakeven costs,” he said. Leszczynski said they only make financial sense at very high ore prices, so perhaps now with iron ore at $200 per tonne we will again see such projects being marketed to investors, but they are likely to disappear again as soon as prices correct downwards.

“If China really wants to avoid Australian iron ore, it actually makes more sense financially to try to get more from Brazil, or from India,” said Leszczynski.

“Indian iron ore is of poor quality but it’s cheaper and shorter haul than whatever they can get from West Africa.”

Germany liner operator Hapag-Lloyd is forecasting a more than threefold increase in earnings this year. The Hamburg-based liner operator has raised its earnings outlook with Ebitda forecast to be in the range of €7.6bn to €9.3bn ($9.2bn to $11.2bn) this year. That compares with around €2.7bn in 2020 and €1.9 in 2019.

The carrier said that global demand for container transport remains at a high level. However, operational disruptions continued to cause significant delays and to contribute to a shortage of transport capacity. That has resulted in record freight rates on trades from Asia to Europe and the United States. “We also benefitted from better freight rates in the second quarter and are looking at a very strong first half-year overall,” said chief executive Rolf Habben Jansen.

“At the same time, since we firmly expect this momentum to carry over into the second half of the year, we have raised our earnings forecast for 2021 as a whole.”

“We will continue to work tirelessly to reduce the impact of supply chain bottlenecks for our customers and to deliver a better service quality,” he said.

Earlier this year, Hapag-Lloyd had expected “a gradual normalization” of liner shipping markets in the second half of the year. As recently as May, analysts had forecast a full-year Ebitda of €5.4bn, up from €2.7bn in 2020. Those estimates are proving too conservative, and Hapag-Lloyd expects Ebitda of approximately €3.5bn in the first half of the year. That compares with around €1.2bn in the same period last year. Ebit is expected to be roughly €2.9bn, compared to approximately €500m in the first half of 2020.

For the full year, Ebit is expected to grow to the range of €6.2bn to €7.9bn, up from €1.3m 2020 and €811m in 2019. Liner shipping companies are benefitting from record high freight rates. Rates from Asia to the US West Coast rose to $18,345 per 40-ftoo equivalent unit (feu), around six times higher than the same time last year. according to the Freightos Baltic Index (FBX).

Rates from Asia to US East Coast are $19,620 per feu, which is around five times higher than last July.

Spot rates for capesize bulkers surpassed the $35,000-per-day mark for the first time in two and a half months on Friday. Brazilian miner Vale, a major charterer of capesizes, has meanwhile lowered its iron ore volume projections for 2021 by 2%.

The capesize 5TC, the weighted average spot rate for five key routes, jumped 6.2% on Friday to $35,713 per day, according to assessments by Baltic Exchange panelists. The last time it exceeded the threshold was on 13 May, when it hit $37,724 per day.

China’s robust demand for iron ore and thermal coal is keeping capesize spot rates elevated, Sevi Katemoglou, shipbroker and founder of Greek broking house EastGate Shipping, told TradeWinds. “Forecasts for this and next year point to a firm demand of coal-fired electricity generation, thus enabling projections for increased cargo flow of the key dry bulk commodity,” she said.

The capesize 5TC may reach $40,000 per day by next week as rates above $45,000 per day in the Pacific basin lead to tight supply in the Atlantic, John Kartsonas, founder of asset-management advisory firm Breakwave Advisors, told TradeWinds. “It seems the strength in the Pacific is keeping more vessels away from ballasting to the Atlantic.”

Vale lowered its expected 2021 production volumes of iron-ore by 7m tonnes to 343m tonnes on Thursday in its first-quarter earnings report. The Brazilian mining giant blamed the revision on licensing issues at some of its northern mines. In the meantime, demand for seaborne transport of iron ore should remain firm as Vale expects drier weather and more volume from a northern mine and a new southern dam. “That new asset [the southern dam] will add 6m tonnes a year capacity, while an increase in dry processing at the major Brucutu mine also in the southeast is adding a net 5m tonnes to overall capacity,” Vale’s executive vice president of iron ore Marcello Spinelli said on Thursday during an earnings call with analysts.