Capesize rates have reached its highest in 2015 as Brazilian iron ore cargo volume scored a year-to-date record.
From 15-19 June, 12 Brazilian iron ore cargoes came to the market, six more than the previous week, and up from the trailing four-week average.
The Baltic Capesize Index assessed average daily rates at USD10,554 on 24 June , up USD1,420 from 23 June.
The Brazil-China rate averaged USD13.10 per tonne on 24 June, up USD0.31 from 23 June.
The Baltic Dry Index hit an all-time low of 509 on 18 February as China’s demand for coal and iron ore waned amid slowing economic growth and a continuing influx of newbuilding deliveries. On that day, daily Capesize rates averaged USD5,447.
Dry bulk consultancy Commodore Research commented, “What remains most important to us is if rates will be able to breach the USD9,000/day level.
“History has shown that in times of oversupply owners often remove Capesizes from the market when rates are low and return to the market at around USD8,000-9,000/day. That level represents a ceiling.”
Commodore noted that from 2012 through the first half of 2013, average daily Capesize rates repeatedly fell to around USD3,000, then climbed to USD8,000-9,000, and then fell back to around USD3,000.
Commodore explained, “The cycle repeats until oversupply is able to be eliminated to the point where Capesize rates can climb above the USD9,000/day level with all available Capesize vessels back in the market.”
Commodore remains bullish for Capesize rates for the second half of the year, a trend reflected in the paper trades.
“A huge amount of additional Brazilian and Australian iron ore cargoes remain set to come to the market later this year and Capesize rates are likely to find significant support,” said Commodore.