The volatile capesize market has fallen 12% this week as miners and charterers paused for breath following a rally to more than $44,000 per day. The average weighted time charter slid to $37,724 per day at the close on May 13 on the Baltic Exchange from $42,370 at the start of the week.

The rally up to almost $45,000 on May 5, the highest for the assessment that began in 2014 encompassing five key trading routes on a 180,000 dwt vessel, had been interrupted by concerns that souring relations between China and Australia after trade talks failed could impact iron ore supplies. Following a rates retreat, the market edged up, before the latest fall.

The market has been extremely volatile, with big movements,” Fearnleys shipbroking said in a note. “On the whole, we see a change in sentiment from the super-positive to a (maybe) expected correction and breather for the miners and charterers.”

Arrow Shipbroking’s head of research Burak Cetinok said a rising number of Atlantic ballasters and slightly lower volumes from Western Australia over the past week may have contributed to the softening in rates. “I believe the heavy sell off in the forward freight agreements market over the past few days caused sentiment to turn rather skittish,” he said, adding that a bit of a pause was inevitable after such a strong run. “Fundamentally, the picture still looks strong.”

The World Steel Association recently published its short-term outlook, forecasting demand growth of 5.8% this year and 2.7% in 2022. China is expected to see growth of 3% this year and 1% in 2022, while advanced economies should see steel production rising by 8.2% and 4.2%, respectively. For the rest of the world, gains in the region of 10.2% and 5.2% over the next years could be on the cards, bar any further waves of coronavirus. It remains uncertain whether growth of almost 20% in India can be achieved given the surge in coronavirus cases there.

Simpson Spence Young head of research Derek Langston said some of the negatives creeping into the capesize market include a reduction in spot activity on some long-haul trades such as US East Coast to India, a quickening of vessel speeds, and an absence of major weather-related disruptions in China. “Another important point to note is that the retreat has been from extremely elevated levels.”

Meanwhile, Port Hedland in Western Australia maintained monthly throughput of 45.8m tonnes in April, of which 45.1m tonnes comprised iron ore exports. This was the same monthly throughput as in March 2020, Pilbara Ports Authority said in a statement.