Futures for capesize bulkers moved sharply higher on Tuesday as once-rallying spot rates plateaued for a third-straight trading day.

Baltic Exchange assessments of the forward freight agreement (FFA) market showed June contracts for capesizes rising 8.9%, or $3,275, during the day to reach just over $39,800 per day.

But Tuesday’s FFA gains came as spot earnings on the Baltic Exchange’s Capesize 5TC rate basket were essentially unchanged at nearly $32,800 per day.

Earlier on Tuesday, Braemar Atlantic Securities, the freight derivatives division of UK shipbroker Braemar ACM, said on Twitter that its index for capesize FFAs saw the June contract trade at a “new high” of $39,750 per day.

Another new high came within hours, with the broker’s trading screen showing June FFAs at $40,000 per day, a 9.6% gain during the day.

Braemar Atlantic tied the bounce to tightening markets on the benchmark capesize iron ore trade from Brazil and Western Australia to China.

China’s moves to pull Shanghai out of a lockdown that has crushed industrial activity, which had slumped nationwide by 2.9% in April compared to the same month of 2021, are helping buoy dry bulk sentiment.

Authorities have announced that restrictions on the city will ease starting on Saturday, with normality expected in mid to late June, according to Braemar.

John Kartsonas, head of shipping and commodities asset manager Breakwave Advisors, said there is much optimism in the market, and futures are trading accordingly.

“It seems the market is heading higher near term, but as you look into the second half of the year, China’s ability to restart its economy will play a crucial role in maintaining the momentum,” he said.

The price for the June FFA contract implies average rates next month that are 21.5% higher than prevailing spot rates.

Though June remains the peak of the capesize futures curve, the FFA numbers were green across the board on Tuesday.

The July contract jumped 7% in the day to top $38,500 per day while FFAs for the third quarter surged 6% to just over $38,400 per day.

The capesize spot market has been trading sideways since Thursday, when the 5TC index ended a rally that took it from about $17,800 per day at the beginning of the month to a peak of just under $18,900 per day.

But Tuesday offered few new fixtures to move the needle.

The Baltic Exchange said mining giant Rio Tinto locked in an unnamed capesize to move a 170,000-tonne iron ore stem from Western Australia to Qingdao at $14.95 per tonne.

That compares to the last done fixtures on Friday priced at $14.95 to $15.15 per tonne.

The Baltic Dry Index, a broad measure of the dry bulk spot market, ticked up just 10 points on Tuesday to reach 3,095.