Spot rates for capesize bulkers surpassed the $35,000-per-day mark for the first time in two and a half months on Friday.
Brazilian miner Vale, a major charterer of capesizes, has meanwhile lowered its iron ore volume capacity for 2021 by 2%.
The capesize 5TC — the weighted average spot rate for five key routes — jumped 6.2% on Friday to $35,713 per day, according to assessments by Baltic Exchange panellists.
The last time it exceeded the threshold was on 13 May, when it hit $37,724 per day.
Sevi Katemoglou, shipbroker and founder of Greek broking house EastGate Shipping, told TradeWinds, that China's robust demand for iron ore and thermal coal is keeping capesize spot rates elevated.
"Forecasts for this and next year point to a firm demand of coal-fired electricity generation, thus enabling projections for increased cargo flow of the key dry bulk commodity," she said.
The capesize 5TC may reach $40,000 per day by next week as rates above $45,000 per day in the Pacific basin lead to tight supply in the Atlantic, John Kartsonas, founder of asset-management advisory firm Breakwave Advisors, told TradeWinds.
"It seems the strength in the Pacific is keeping more vessels away from ballasting to the Atlantic."
Lower expectations
Vale lowered its expected 2021 production capacity of iron ore by 7m tonnes to 343m tonnes on Thursday in its first-quarter earnings report.
The Brazilian mining giant blamed the revision on licensing issues at some of its northern mines.
In the meantime, demand for seaborne transport of iron ore should remain firm as Vale expects drier weather and more volume from a northern mine and a new southern dam.
"That new asset [the southern dam] will add 6m tonnes a year capacity, while an increase in dry processing at the major Brucutu mine also in the south-east is adding a net 5m tonnes to overall capacity," Vale executive vice president of iron ore Marcello Spinelli said during an earnings call with analysts on Thursday.
This story was amended to reflect Vale's 2021 guidance as expressed in iron ore output capacity.
