The capesize bulker market achieved a fourth-straight day of gains on Wednesday as signs of a rebound in China’s manufacturing arose during Golden Week, a time known more for festivities than humming factories.
The Baltic Exchange’s Capesize 5TC spot rate basket jumped 6.5% to top $24,700 per day on Thursday, reaching its highest point since June 2022 and posting a steady 20.5% gain since Friday.
Among the day’s fixtures, Fortescue Metals Group paid $10.65 per tonne to move 170,000 tonnes of iron ore from Port Hedland, Australia, to Qingdao, China, with loading from 20 to 22 October.
That was an improvement from Friday, when Rio Tinto paid a lower $9.80 per tonne to ship the same amount of ore on a similar route from Dampier, Australia, to Qingdao after loading the vessel from 15 to 17 October.
“After a steady day yesterday in the spot market, activity levels are higher today in both the Atlantic and Pacific basins, driving rates higher,” Jefferies analyst Omar Nokta said in a note on Thursday.
“As we noted previously, higher dry bulk rates this week were unexpected as market participants anticipated a quiet Golden Week holiday.”
But the capesize market may have benefitted from an unexpected boost this week from China’s Manufacturing Purchasing Managers’ Index rising to 50.2 from 49.7 in August, Signal Group said in a report on Thursday.
The latest reading of the National Bureau of Statistics index indicated manufacturing expansion for the first time since March, because anything above 50 indicates growth, while anything below it indicates contraction.
“Moreover, there was an acceleration in activity in the services and construction sectors last month, as evidenced by a separate index that reached 51.7, reflecting its strongest performance in three months,” Signal Group said.
Capesize spot rates on benchmark routes have climbed during Golden Week as China maintained robust imports of iron ore from Brazil and Australia in the weeks leading up to the weeklong celebration.
The average spot rate for the C14 voyage between Brazil and China have gained 19.7% since Friday to nearly $19,700 per day on Thursday, according to the Baltic Exchange. Meanwhile, the average spot rate for the roundtrip C10 voyage between Australia and China has risen 21.3% to about $23,800 per day.
