The Panamax segment has recovered especially well, reaching an average spot rate of nearly $12,500 early this month. The rate was approximately the same for a much larger Capesize.

Insiders say that the improvements are driven by recovering Chinese demand for commodities, falling newbuilding activity and increased scrapping.

“The market is fundamentally improving and barring a severe disruption to the world economy, it should be plain sailing from the second quarter [of 2017] onwards," said Scorpio Bulkers president Robert Bugbee, speaking to the Wall Street Journal.

Even as rates have recovered, operating costs have declined, say analysts with Drewry — at least for now. For 2016, operating costs went down by an average of 4.4 percent across all vessel categories — in addition to a reduction of 1.5 percent in 2015.

However, Drewry editor Nikhil Jain predicts that costs will rise again next year.

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