Volatility surges as Capesize sentiment turns sour | Report
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Futures curve flattens as focus turns on the struggling Chinese property market – Despite the recent stabilization in spot rates, dry bulk futures came under pressure, reflecting, in our view, increasing disappointment in recent stimulus efforts to revive the Chinese property sector which would have required some much-needed iron ore volumes, and thus higher dry bulk demand, for the next several months.
Iron ore prices have already been under significant pressure, dropping some 20% in the last week alone, as Chinese steel mill patience run out, having been faced with negative margins for months now without any end in sight. Although seasonally iron ore shipments will gradually pick up, especially from the long-haul Brazilian market, lower iron ore prices mean fewer shipments from the high-cost marginal exporters of West Africa and South America that have provided a boost in tonne-mile demand for the last year or so.
