The bulker sector has risen from where it was a few weeks ago, but the futures market is indicating a turn for the worse over the next several months. The Baltic Exchange’s Capesize 5TC, a spot rate average across five benchmark routes, has improved 170% since 12 September to just over $16,900 per day on Monday. But over the same period, November freight forward agreements (FFAs) slipped from nearly $17,800 per day to about $15,100 per day. The futures curve continues to point downward into next year. January contracts, for example, have tumbled from $9,643 per day on 12 September to $8,714 on Monday. February FFAs stand at $6,164 per day. “Risk revolves around Chinese production curbs, economic growth and easing of congestion,” Fearnleys Securities said in a report on Monday.

The low market expectations have pushed some capesizes to the scrapyards, Clarksons Securities noted. “In total, four capesizes were sold for scrap in September,” analyst Frode Morkedal said in a report on Monday. Like the other three, the last vessel was also approaching its special survey and missing [ballast water treatment systems].” But higher commodity prices because of global stimulus programs and port congestion could serve as “a key driver” toward improving rates across dry bulk shipping, Morkedal said.

Nonetheless, futures for smaller bulker classes are also pointing to lower spot rates ahead, even though panamax FFAs have been improving. The Baltic Exchange’s Panamax 5TC ascended 71% since the end of August to reach $18,741 per day on Monday. Though the FFA market is signaling that lower spot rates are in store, November contracts have risen 21.7% over the same period to land at $17,800 on Monday, up from the at the end of August. January contracts have also improved from $11,700 per day at the end of August to nearly 13,400 per day on Monday. February contracts were priced at nearly $11,400 per day on Monday.

The Supramax 10TC gained 12.9% since 12 September to nearly $18,300 per day on Monday, but FFAs for the route basket also pointed lower spot rates to come. November contracts came in at just over $16,700 per day on Monday, down 2.6% over the same period. January contracts have inched upward by 1.5% to $12,700. February FFAs on the Supramax 10TC were priced at nearly $11,700 per day on Monday.