Capesizes led the charge with spot rates rising to almost $20,000/day in late March - more than five times their levels of just a few weeks earlier, although they have since fallen to $15,000/day. Meanwhile Panamax rates have risen above $11,000/day for the first time this year, having averaged $7.500/day during February. Handysizes are now over $8,000/day, up almost 50 percent since February.

Supporting the better spot rates are pockets of stronger underlying fundamentals, such as Brazilian iron ore exports (up 10 percent yoy in Q1) and Chinese coal imports (up 48 percent yoy). This is partly explained by a recovery in industrial activity in China - steel output is up six percent yoy for the year to date.

“MSI is more positive on the near-term outlook for Capesize spot earnings, partly driven by the latest data for Chinese steel and iron ore import demand,” says MSI Senior Analyst Will Fray. “However, we do expect this support to wane in Q2/Q3 and are still mindful of large port stockpiles of iron ore and evidently we are more negative than the forward freight agreements market for June and September periods.”

Better rates have brought the sale and purchase market back to life with an increased pool of potential buyers supporting a noticeable rise in the number of transactions taking place. Some 190 second-hand vessels were sold during Q1, up 86 percent on the same period of 2016.

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