Capesize bulker spot rates significantly undulated this past week as global trading of iron ore stutters due to China’s stumbling return to construction, according to an analyst. The Baltic Exchange’s Capesize 5TC basket of spot-rate averages across five key routes gained 26.6% from last Friday to $23,200 per day on Wednesday, but then it dropped 19.2% to just over $18,700 per day by Friday. All told, it closed the week with a 2.4% gain.

The average spot rate for the benchmark C14 iron ore route from Brazil to China had similar ups and downs, jumping 26.5% from last Friday to nearly $18,400 per day on Wednesday before crashing 29.2% to about $13,000 per day on Friday. “The iron ore trade has shown some improvement over the past two weeks, with firmer Chinese steel prices and global iron ore prices,” Jefferies analyst Omar Nokta wrote in a note on Friday. “We note that there have been fits-and-starts with the recovery as steel production remains under pressure worldwide.”

He noted that China’s crude steel production reached 74.5 MMT in November but was still down from 79.8 MMT in October, according to the World Steel Association. Those figures are well below China steel output peaking at 99.5 MMT in May 2021, and production outside of China remains weak with output down 12.6% year-over-year, he said.

Evergrande, China’s largest property developer, provided some help for China’s steel market when it announced on Wednesday that it had resumed work on 631 pre-sold and undelivered projects after receiving special loan money from the government.