The average spot rate for capesize bulkers fell like a stone over the past week as Pacific rates to ship iron ore from Australia to China dropped steadily.
The capesize 5TC, a spot-rate average weighted across five key routes, declined 43.5% over the past seven days to hit $22,613 per day on Friday.
The average spot rate for the C10 transpacific roundtrip voyage, which covers the iron ore trade between China and Australia, contributed significantly to the capesize sector's rapid decline.
It plummeted 57.3% over the same period to $16,767 per day on Friday, despite Australian mining giant Rio Tinto chartering seven unnamed capesizes to carry ore along this route during the week.
The rates at which Rio Tinto agreed to pay for these voyages fell from $13.60 per tonne on Monday to $9 per tonne for the latest reported fixture signed on Thursday.
"Despite adverse weather reported in various Chinese ports, the delay in tonnage proved to be insufficient to stave off a haemorrhaging of value on the rates," Nick Ristic, a dry cargo analyst with Braemar ACM Shipbroking, wrote in a note on Thursday.
"The West Australian miners successfully maintained pressure on the market as it traded down from the start of the week. Although we have officially entered ‘cyclone season’ in Australia, there has been very little to disrupt the production in this particular part of the world."
Average spot rates for the smaller asset classes also fell over the seven-day period, but by not as much.
The panamax 5TC fell 20.3% to $21,994 per day on Friday, while the supramax 10TC slipped 3.2% to $27,158 per day. The handysize 7TC declined 1.6% to $27,842 per day.
