The capesize market has been jolted out of a slump, with spot rates reaching a five-month high as the much-anticipated activity from Brazil increased. The average weighted time charter closed at $32,885 per day on the Baltic Exchange, up 46% from a week ago. Rates are 190% higher than a month ago. According to ship brokerage Fearnleys, rates saw gains in the east and in the west, with “greater expectations as well as actual activity out of Brazil being the main driver”. With Western Australian iron ore rates following, there was “still room for a further positive trend”, it said in a note this week. In an earlier note, the brokerage said that several fixtures for coal to India from Indonesia had been concluded on capes.

Capesizes, which are the most volatile of all dry bulk segments, have now quickly surpassed panamaxes, supramaxes and handysizes in terms of day rates.

Golden Ocean’s chief executive Ulrik Andersen said he has seen “an insatiable appetite for coal into India” from Indonesia and Australia which is driving up rates for both capesizes and panamaxes. In addition, Brazil’s mining giant Vale has re-entered the market.

China’s removal of coal tariffs is a signal for buyers to increase purchases, perhaps from Russia, which will add support, he said, adding that concerns about a potential slowdown in China leading to a drop in demand will not threaten the capesize story due to pent up demand elsewhere. “We are optimistic about the rest of the year, which is also reflected in the forward curve.”

Indeed, June and July were priced above spot levels, at $36,500, while the third quarter was at $37,500, according to figures from broker GFI as of May 11. That is slightly lower than the previous session. Congestion in China is also still a factor in the market, although with a slight decline. According to the Signal Ocean platform based in Greece, 126 capesizes were waiting in the second week of May versus 137 in the prior week. The number of ballasters was also decreasing, dropping by 10 vessels to 61, its data showed. That is 25% lower than the last peak in mid-March.