Capesize leads the buoyant sentiment What everyone seems to be talking about is the impressive threshold the capesize market passed; that is the US$30 000 mark that capesizes went across on average daily returns. They did, however, soon adjusted to circa US$27 000/d which is a satisfactory number still. This change on capesize earnings should not be viewed as a mere drop, but better a correction stemming from the spot market’s inherent volatility; sentiment remains positive. China’s reopening has of course a significant role to play in this upward trend on freight rates as the Asian nation consumes about 70% of the world’s seaborne iron ore. What its coronavirus-induced shutdown during 1H20 meant, was that a significant backlog had been created. Further, by the time the country resumed its industrial activity, Chinese steel inventories started to steadily ease (following an all-time high in March), currently standing higher at an only 4% y/y. Brazil and Australia are both trying to capitalise on China’s strong demand for the raw steelmaking ingredient, both pushing their production and exports into China to larger volumes. Brazilian Vale’s efforts to maintain its annual guidance for ore production are of crucial importance, since the steady cargo flow from the South American nation into China is pushing the tonne-mile demand upward, thus positively assisting the freight rates for the capesize types. Australia’s ore exports have also increased, with indicative the month that has just passed: the country broke records in June by exporting 51.7 million tonnes of iron ore. Forecasts for capesize earnings remain positive for the balance of the year (virus permitting). Panamax rally has commenced What we should keep in mind while assessing the panamax spot market as well as where it is headed, is that for the last three years Q3 rates have been higher than Q4, contrary to the usual seasonal patterns. Despite the year 2020 being abnormal in various way, this can very well be the case with a strong 3Q20 currently in play. A Tess 82 kamsarmax type is now worth over US$14,300 per day in the spot market.