Spot rates for capesize bulkers took another dive this week, but there is still room for optimism, according to market experts. The capesize 5TC, a spot-rate average weighted across five key routes, dropped 30% from a week ago to $36,065 per day, according to Baltic Exchange data. This rapid decline follows two straight weeks of 23% drops from when the average reached $86,953 just three weeks ago as traders tried to take advantage of high commodity prices that have since cooled down.

“As always is the case, I think it is a combination of things,” John Kartsonas, founder of asset-management firm Breakwave Advisors told TradeWinds. “Coal prices have been in a freefall, and that is probably causing is pause by coal traders in terms of activity.” Coal prices have fallen 17% since 5 October to $221.80 per tonne on Thursday, according to the New York Merchantile Exchange.

Iron-ore prices have meanwhile slid 15% to $110.70 per tonne. This has caused less demand for ships, especially in the Atlantic basin, but the falling rates are nothing to get too worried about, he said. “This is a natural correction, and nothing more,” he said. “We are still in a strong upcycle for dry bulk, but as always, ups and downs are part of the game.”

Coal demand should return once coal prices stabilize amid China’s plans to cap them and possibly subsidize imports, he said. “Volatility will calm down and the possibility of a late year rally is real, although still too early to call for that.” The Baltic Exchange noted that trade from Brazil to China plummeted throughout the week, causing the spot-rate average on that benchmark route to cascade 34% to $28,195 per day on Friday. “While rates have now halved from their highs in early October, levels are still thought to be robust and we are only part way through the Q4 high season,” it said in its weekly report on dry bulk shipping.

Australia’s Rio Tinto has hired the 170,000-dwt Amorito (built 2012) to carry coal at $12.10 per tonne from Australia to China in the second half of November. The benchmark Australia-China route’s freight rate improved $0.16 per tonne to $12.51 per tonne on Friday.