Observers note capes trading spot are currently seeing daily levels of approximately $15,100, which represents a weekly gain of nearly 50%.
In the period market vessels fixed for a year are currently enjoying averages of $28,000 per day and ships taken for three to five years are earning around $24,500.
“This supports the thesis of a firming market going forward,” Erik Nikolai Stavseth, an equity analyst at Arctic Securities, told clients Monday.
In a daily market briefing released by Global Hunter Securities industry veteran Omar Nokta offered up a similar forecast.
“We have continued to point out that the time charter market is showing very obvious signs of a charter market break-out within dry bulk,” he told investors in a daily report.
“Significant volume has been seen in the one-year capesize charter market, with rates ranging between $21,500 per day and $27,000 per day.”
Nokta says one of the most promising fixtures he has seen as of late involved Brazilian mining giant Rio Tinto, which recently booked a 10-year-old cape for two years at a rate of $26,000 per day.
“This is the highest rate achieved on a two-year charter in several years and is at a healthy premium to current spot rates and the FFA curve, which is at roughly $24,000 per day over the next two years,” he noted.
Another encouraging sign came from a fixture tied to Swiss commodities trader Trafigura, which recently hired an “eco” newbuilding called the Cape America that is due for delivery in 2014 for 12 months at a rate of $33,000 per day.
“Meanwhile the newbuilding charter at $33,000 per day seemingly indicates the fuel savings may be quite a bit higher than previously projected,” Nokta continued.
Justin Yagerman of Deutsche Bank believes the recent rally in the capesize segment has been driven by an increase in demand for tonnage to transport iron ore from Brazil to China.
“We also note that the less volatile (compared to spot) capesize time-charter market has illustrated considerable strength as of late,” he told clients Monday.
Today, the Baltic Exchange was quick to point out that freight rates remained firm despite holidays in Brazil, Greece and Western Australia, which serves as further evidence that both the spot and period markets may continue to gain momentum in the days and weeks to come.