Capesize daily rates soared by 10% on July 2, surpassing the $30,000 mark, as reported by Splash247. This surge is attributed to record-breaking bauxite shipments from West Africa to China. Guinea, home to the world's largest bauxite reserves, has seen a sharp rise in demand from China. Bauxite, the primary source of aluminum, is essential for China's aluminum production, which increased by 5% to 3.65 million metric tons in May.
As China ramps up its aluminum production to meet the booming demand from the solar power and electric vehicle industries, bauxite imports have surged. This increased demand has consequently driven up the demand and prices for Capesize vessels. Notably, the Guinea-China shipping route has surpassed Brazil in ton-days for the first half of the year.
Favorable weather conditions and a drier-than-usual rainy season have facilitated high levels of bauxite mining and export from Guinea. According to investment bank Jefferies, the demand for Capesize vessels is outpacing new supply, driven by a 10% increase in long-haul bauxite trade in the first half of 2024. Additionally, the iron ore trade, another key cargo for these vessels, is growing at a rate of 5%.
