The capesize bulker market tumbled over the past week as owners and charterers held off on fixing ships in anticipation of February's Lunar New Year and Beijing Winter Olympics.
The capesize 5TC, a spot-rate average weighted across five key routes, dropped 40% to $7,390 per day on Friday, according to Baltic Exchange data.
"Prior to the lunar holidays scheduled in Asia, owners seem more inclined to swallow the ever decreasing time charter returns in the Pacific as opposed to braving a ballast past Singapore to where the market is obscure and murky at best," Braemar ACM Shipbroking said in its weekly dry bulk shipping report.
"Operators have next to no appetite to speculate whilst the margins are so thin and moreover seem preoccupied with ensuring that their own fleets are employed."
Australia's Rio Tinto fixed an unnamed capesize to ship 170,000 tonnes of iron ore from Dampier in Western Australia to Qingdao, China at $7.35 per tonne. Loading is set for 30 January to 2 February.
A week earlier, the mining giant chartered a to-be-nominated capesize to move the same amount of ore on the same route at $7.10 per tonne. The ship will take on the ore from 5 to 7 February.
Meanwhile, heavy rains hampered Brazil's mining operations and fuel prices rose around the globe, Braemar added.
"The current forecast is that we are unlikely to see much demand till the second half of February ," the report said.
The Beijing Winter Olympics, which will hold events in China’s steelmaking province Hebei, and the nation’s weak property sector may also hinder near-term capesize rates, according to Simpson Spence Young.
"There can be no doubting the pressures on credit and the real estate sector in China, but we are also aware of the potential for some form of stimulus package should the government deem it necessary," Derek Langston, head of research, wrote in his latest weekly report.
But an easing Indonesian coal ban, recovering Indian coal imports and higher exports of Australian wheat and Brazilian soybeans could offset lower demand for iron ore in early 2022, he said.
"Although facing structural decline in many parts of the world, coal trade dynamics still exert a significant influence on the dry bulk freight markets," he wrote.
Spot rates for the smaller asset classes also declined over the past week.
The panamax 5TC slid to $18,087 per day on Friday, a decline of 15.4% on the prior week. The supramax 10TC declined 7.8% over the week to $19,327 per day.
The handysize 10TC fell 7.5% to come in at $19,859 per day on Friday.
