Dry bulk fertilizer freight rates continue surge

Freight rates of dry bulk fertilizer products have accelerated upwards across major routes, hitting new highs this week.

An average basket of 19 selected fertilizer freight rates, spread across major shipping routes for urea, phosphates, NPKs, potash and sulphur, jumped to $48.34/t, Argus calculates. This new high marks a $3.50/t rise on levels last week.

The basket is now up by an average of $8.89/t since the end of May. Freight rates had surged through the first quarter, driven higher by improving global trade, iron ore demand in China and icy conditions in Baltic ports (see chart).

Rates did dip from mid-March, with ice melting in the Baltics, before stabilising in mid-April. Rates have since rallied to new highs in June. Grain exports from Latin America and the US Gulf have supported levels in the Atlantic. East of Suez, heightened demand for continued shipments of iron ore from Australia to northern China has also pushed levels higher, as have coal-vessel fixings and increased bunker fuel prices.

The freight basket has almost doubled since the start of the year, increasing by an average of $23.95/t.

By Harry Minihan

Dry bulk fertilizer freight rates