Improvement in the physical market is tracking progress in the futures arena with second half capesize paper now trading at double what the ships have earned in the year to date.
Peter Sand, chief analyst at Bimco, said: “We have seen the BDI constantly go higher since end-May.
“Chinese iron ore fixtures has been on a slow but rising trend throughout the year, so what we are seeing now has been long coming.”
Today the BDI reached 829 points, compared with the average of 576 points between February and May.
“As we have said before, Bimco does expect rising volumes as the year progresses which should support the market if the supply side also contributes with limited fleet growth,” Sand said.
“In spite of the most recent development the market is still moving forward on fairly thin ice.”
Capesize rates sat at $10,600 daily today, a 2015 high.
Omar Nokta of Clarksons Platou Securities says FFAs for the second half expect rates of $12,250 per day.
This compares with the $6,000 per day average across the opening six months of the year.
SSY Futures said the morning session opened with continued excitement of last nights close bringing an active morning.
"The afternoon traded a range of lower levels as optimism disappeared as the curve was sold down leaving the market nervous for tomorrows direction," its daily report said.
