Capesize bulker spot rates slide 4.5% in a day as iron ore and steel prices drop

Spot rates for capesize bulkers receded on Thursday as prices for iron ore and steel fell in the face of weakening demand.

The Baltic Exchange’s Capesize 5TC of spot-rate averages across five key routes slid 4.5% to $17,505 per day, marking the lowest level in a week.

Clarksons Securities pointed to reports that iron ore prices have fallen to below $90 per tonne, bringing them to their lowest level this year, and steel prices have slipped as Beijing’s Covid-19 situation worsened.

The falling prices have prompted the World Steel Association to expect a 2.3% decline in global steel demand for 2022.

As capesizes led the Baltic Dry Index into a one-day drop of 34 points to 1,837, bulker shares also slid, with the Breakwave Dry Bulk Shipping Exchange Traded Fund falling 2.8% to $8.70 in afternoon trading in New York.

Clarksons said it sill expects dry bulk equities to remain firm as long as average capesize spot rates stay at or above $15,000 per day.