Capesize spot rates reached their highest point since October this week off a rising futures market before cooling off in the past few days.
The weighted time-charter equivalent (TCE) average rate for the asset class leapt to $26,489 per day on Wednesday from $21,131 per day on 8 January before falling to $23,989 per day on Friday, according to the Baltic Exchange.
"The capesize market surged this past week to a three-month high, as a stronger outlook for the market took hold," it said in its weekly wrap-up on dry-bulk shipping.
The Baltic Exchange on Wednesday attributed the capesize physical rally to the paper market rising on 2021 optimism, but noted the market viewed the paper spike as unsustainable.
"Whether this is a sign of too far too fast or possibly that current levels justify some to take profits is unknown," it said on Wednesday.
Capesize TCE rates dropped to $25,497 per day on 13 October from $27,333 per day on 12 October, marking the last time they were above $26,000 per day.
Freight-forward agreement (FFA) rates are still showing momentum after pulling back for a few days as Friday showed an $844-per-day gain for February to $15,338 per day.
Those for the first quarter of this year also improved $466 per day to $16,679 per day.
FFA volumes rose to 6,251 lots on Monday from 2,310 lots on 6 January but then moderated to 4,018 lots by Thursday. A lot is equal to 1,000 metric tonnes of cargo or one day of charter hire.
Brokers attributed the FFA selloff to a fire at Vale’s port Ponta da Madeira on Thursday that has been extinguished.
