Spot rates for capesize bulkers plunged for a third consecutive week, but there is still room for optimism, according to market experts.

The capesize 5TC, a spot-rate average weighted across five key routes, dropped to $36,065 per day on Friday, a seven-day slump of 30%, according to Baltic Exchange data.

This rapid decline represents a 58.5% drop since rates peaked at nearly $87,000 per day on 7 October, when traders were trying to take advantage of high commodity prices that have since cooled down.

"As always is the case, I think it is a combination of things," John Kartsonas, founder of asset-management firm Breakwave Advisors.

"Coal prices have been in a freefall, and that is probably causing is pause by coal traders in terms of activity."

Coal prices have fallen 17% since 5 October to $221.80 per tonne on Thursday, according to the New York Mercantile Exchange.

Iron ore prices have meanwhile slid 15% to $110.70 per tonne.

'Natural correction'

This has caused less demand for ships, especially in the Atlantic basin, but the falling rates are nothing to get too worried about, he said.

"This is a natural correction, and nothing more," he said.

"We are still in a strong upcycle for dry bulk, but as always, ups and downs are part of the game."

Coal demand should return once coal prices stabilise amid China's plans to cap them and possibly subsidise imports, he said.

"Volatility will calm down and the possibility of a late year rally is real, although still too early to call for that."

The Baltic Exchange noted that trade from Brazil to China has plummeted over the course of the week, causing the spot-rate average on that benchmark route to fall to $28,195 per day on Friday, a seven-day decline of 34%.

"While rates have now halved from their highs in early October, levels are still thought to be robust and we are only part way through the Q4 high season," the exchange said in its weekly report on dry bulk shipping.

The benchmark iron ore route from Western Australia to China saw its freight rate reach $12.51 per tonne on Friday, down from $14.26 on 22 October.

The Baltic Exchange said on Friday that the Rio Tinto booked a 170,000-dwt bulker, which has not been named, a day earlier to carry iron ore to China from Dampier in Western Australia at $12.25 per tonne.

That’s lower than the $14.40 to $15.85 per tonne that the mining giant paid for similar voyages a week earlier.

Eric Martin contributed to this article.