Market sentiment for Capesize rates saw an improvement after Vale’s announcement to restart Brucutu mine, bringing back around 30 million mt per year of iron ore to the market.
Higher freight derivatives rates were seen in the week, thanks to the anticipation of fresh cargoes in the Western Australia to Qingdao route, South Africa and Brazil.
The lack of fresh cargoes across Australia and Brazil have kept Capesize rates low and fundamentals weak due to disruption from Cyclone Veronica and dams issues in Brazil.
Capesize index managed to turn positive for the first time on Monday, after enduring weeks of depressed rates.
Capesize market remained quiet throughout the week with thin activities from the Asia Pacific and Atlantic regions. However, some trade sources observed that the market fundamentals are slowly returning to a stabilized level.
The return of Chinese trade participants from Spring festival failed to create any uproars in the Capesize market this week amid tighter supply from Vale.
It is the usual time of the year again, when the market took a break for the Lunar New Year celebrations. The quietness was then rocked by the unfolding events from Vale’s dam collapse.
Freight rate opened the week on weaker market fundamentals with concern over the China’s economic slowdown and the softening Panamax market.
The Baltic Dry Index (BDI) appeared to be a tight rope walker this week on the verge of falling off from the 1,000 marks.
Capesize freight rates rose higher this week, thanks to firmer bunker prices. However, as the week goes by, trade uncertainty started to creep into the market due to weaker freight derivative market.