Spot rates for capesize bulkers took their biggest leap in weeks on Wednesday as commodity demand remains high against tight supply. The capesize 5TC, a spot-rate average weighted across five key routes, jumped 8.3% to $44,495 per day, according to the Baltic Exchange. The average rate for the Europe-China route spiked 9.5% to $67,300 per day, while that for the China-Japan transpacific round voyage leapt 7.4% to $49,107 per day.

“I think now we reached new highs, it becomes a gamble on how high the spot index will go,” John Kartsonas, founder of asset-management advisory firm Breakwave Advisors, told TradeWinds. “If you get any positional tightness and you have an aggressive owner positioned accordingly, the sky is the limit.” But he warned against trying to predict how high rates will go in such a volatile market. “Although we all try to do it, I think it is a fool’s game,” he said.

“Averages are what matters, and I think the rest of the year is priced at around $40,000 per day, which, in my view, is where we will end up averaging.” He said capesize rates may slip amid any softening of the sub-capesize market as the weaker winter period approaches. “Any pullback there and capes will also feel the impact,” he added. “That is well priced in for now in the futures market.” But at the end of the day, it’s anyone’s guess, according to Kartsonas.

“Those who can accurately predict those factors can also pinpoint any potential correction down the road,” he said. “However, one should always keep in mind that supply in shipping is inelastic, and rates can exceed even the wildest forecasts.”

Average capesize rates may go as high as $55,000 per day if iron-ore shipments reach second-half predictions and global steel output stays high, Noble Capital Market analyst Poe Fratt said. They may go even higher if coal keeps flowing to China and port congestion does not abate, he said.

“I would prefer to see rates stay here,” he said. “Companies are generating high cash flow and there would be less incentive to order and build new capacity.”

Owners still need to remain on the lookout for any developments that may reverse positive market momentum, he said. “Rates could crash hard on a change in the global economic outlook — China is the key — or even drop due to seasonality, but any drop should be tempered by the supply outlook,” Fratt said.

“Higher highs are possible but higher lows seem likely given the supply picture. It’s hard to predict but if the stimulus well runs dry, there could be a reckoning.”