European steel producers are booking capesize bulk carriers to take panamax-sized iron ore cargoes from Brazil because the smaller vessels are much more expensive.
It has been more than a decade since the last time freight rates for panamaxes traded at such a large premium to those for capesizes, according to Baltic Exchange data compiled by TradeWinds.
News that 75,000-tonne stems of iron ore — normally reserved for panamaxes — were being fixed onboard capesize vessels first emerged last week, but more deals have come forward since.
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