Dry bulk capesizes this week reversed course from an abysmal plummet, but shipowners may want to keep the champagne on ice for now.
Average TCE rate spiked 51% to $6,387, according to Baltic Exchange, stopping a nosedive begun late January when the Vale dam disaster took 40 million tonnes of iron ore off the market.
The Brazilian iron ore giant closed 50 tailing dams for testing soon after one in Faijeo collapsed on 25 January, killing dozens of people.
Capesize rates, already hurting from US-China trade tensions, have since then fallen almost 70% to $4,236 — thanks to less vessel demand — before heading upwards this week.
That upswing may be temporary, however, with less tonnage sending iron ore from Australia to China to check oversupply amid low rates, according to a Maxim Group analyst.
"It's not a huge fundamental shift or the start of a huge rally," James Jang told TradeWinds.
He said dry bulk owners will still carry the commodity at such low rates for much shorter trips from Australia because it's better than idling their ships.
"They're getting something instead of nothing," he said.
Rates will probably maintain a relatively low average of around $10,000 for this year's second half by reaching $7,428 in the first quarter and $12,000 in the second, he said.
"The pain will be in the first half of this year until Vale comes with its 40 million tonnes," Jang said.
"That will help the market tremendously."
