Large bulker spot rates sank to the lowest level in nearly two months on Wednesday, but futures were priced far higher, pointing to expectations of a rebound. The Baltic Exchange’s capesize 5TC, a spot-rate average across five key routes, slipped 8.3% on Wednesday to $12,355 per day. That was the lowest level for spot earnings since 17 February. By contrast, freight forward agreements for May came in at $24,293 per day, after falling 5.9% from Tuesday, according to Baltic Exchange data.

Fortescue Metals Group (FMG) on Wednesday fixed two unnamed capesizes to move 160,000 tonnes of iron ore from Port Hedland, Australia to Qingdao, China, one at $8.50 per tonne and the other at $8.75 per tonne. Loading for these two ships is expected to take place from 21 to 23 April. Two days earlier, FMG hired a Berge Bulk-owned capesize to transport 160,000 tonnes of the same commodity on that route at $10 per tonne. Loading is set to commence on 18 April.

John Kartsonas, founder of dry-bulk ETF trading platform Breakwave Advisors, said that where physical and futures markets go is “anybody’s guess”, but he said this year’s low Brazilian iron ore volumes might give optimism for higher output later in 2022. “The market has vivid memories of capes going to almost $100,000 per day, ” he told TradeWinds. “In a market that has seen the trading range expanding so much in the last two years, I don’t think it is a stretch to say that capes have the ability to reach or exceed such levels.”

FFAs point to rising rates over the next few months, with the futures curve peaking at $34,214 per day for August contracts, which dipped $536 on Wednesday. The FFA curve “looks overly optimistic”, UK-based broker Alibra Shipping told TradeWinds. FFA rates for the smaller ships are staying much closer to the physical market.

Panamaxes are showing a front-month rate of $26,272 per day on Wednesday after dipping 5% from Tuesday, Baltic Exchange data showed. By comparison, spot earnings on the panamax 5TC fell 2.8% to $25,809 per day.

May contracts for supramaxes came in at $28,683 per day after shedding $813 per day since Tuesday. The 10TC landed at $28,652 on Wednesday, after dropping $608 during the day.