A drop in the capesize market during the past week has been dismissed as a temporary correction by leading analysts.
Spot rates for the ships have fallen by more than one fifth in the past week and sat at $19,344 per day on Tuesday, according to the Baltic Exchange.
Wilhelm Flinder of Pareto Securities says less activity out of Brazil is driving the setback, while the commodity demand picture is largely unchanged.
“With decent iron ore demand, and coal prospect remains firm, as well as FFA rates now halting its decline, we argue momentum will turn for the better soon,” he said.
Both iron ore and coal shipments to China were down last week but low Indian stockpiles should be positive for shipping demand, Flinder says.
Magnus Fyhr of Seaport Global agrees the softness will be short lived.
“Brazilian iron ore production should continue to increase through the back half of the year,” he said.
