After a heated rise starting in mid-August through September which saw capesize rates more than double and almost triple, the month of October, and in particular the second half of October saw a step back as the market excitement cooled down and took a breather.
Only 95 ships acquired cargos during the four weeks ending on 28 October, compared to 162 during the previous 4-week period. Demand for steel remained depressed, pushing down the Chinese HRC prices to $570/ton, a drop from $600/ton at the beginning of September. Iron ore prices, though, were holding steady, at $133/ton. All combined, it was not good news for steel production margins, causing them to be at their lowest since January of 2011. Panamax rates were also affected, falling by 8% to $13kpd.
October demonstrated the not yet firm confidence in the dry bulk market recovery. November has seen less volatility and hopefully, a stabilization, as cargo demand growth catches up to the fleet expansion experienced during the dry bulk boom and in recent years.