Seaborne Bauxite’s Increasing Role in Capesize. Pros and Cons?

Over the past few months, there’s been chatter that increased shipments of Guinea’s bauxite have shifted the dynamics of Capesize (160-220K dwt).

Using AXSMarine data, we attempt to dissect the impact of this development.

For the first 5 loading months of 2021 to 2023, we observe that the ton-days* for Capesize bauxite shipments had improved from 1.6 bln to 2.9 bln.

As a result, bauxite’s share of total Capesize ton-days had improved from 9% in 5M-2021 to 15% in 5M-2023.

Meantime, iron ore’s share of total Capesize ton-days had eroded from a commanding 68% in 5M-2021 to a still sizeable 60% in 5M-2023.

Indeed, the Capesize market is more influenced by bauxite shipments, particularly by the seasonality of those loading ex-Guinea as supplies from Indonesia dwindled.

Seaborne iron ore remains the dominant commodity and “make or break” factor for large-sized vessels.

Interestingly, albeit at a very small scale, we are also observing Capesize vessels being used for the transportation of other bulk commodities like manganese ore from Ghana, limestone from UAE/Oman, chrome ore from South Africa/Mozambique, salt from Mexico, and petroleum coke from the USA.

While it’s good news that Capesize benefited from higher Guinea’s bauxite shipments, its reliance on China as the end destination had been further entrenched in terms of longer-haul volumes and loading choices.

This is exemplified by the fact that China’s share of Capesize shipments in terms of mt, jumped from 61.8% in 5M-2021 to 65.0% in 5M-2023.

Moving forward, Capesize’s prospects are essentially tied to the economic developments of the Asian behemoth.

*Ton-days is the product of Cargo Intake (in MT) and voyage duration (in Days), which include discharge waiting time