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According to MANA, Despite the rising rates, some shipbrokers called for caution as the physical market may be slow to react upon the gains made in the paper market.

“The physical appears to be firming in both oceans but with the capesize paper already pricing in a significant move north, it’s hard to justify any additional moves until the physical lifts further,” said an FIS FFA broker.

Leading the freight rate charge, capesize 5 Time Charter average rose from $7,780 on Monday, to $8,411 on Wednesday, an increase of 8% over the span of days.

There is also potential for the capesize market to grow in the second half of the year, as iron ore miners in Australia and Brazil have completed less than 40% of the scheduled deliveries of iron ore by mid-year.

The world biggest consumer of iron ore is also likely to surpass its previous import volume high of 2016 with a breathtaking pace of cargo intake. For the first six months of 2017, China’s iron ore imports stood at 539m tonnes, up 9.3% compared to same period last year.

In June alone, China imported around 94.7m tonnes up 3.3% from May’s volume of 91.5m tonnes, according to customs data. At this rate, the country’s annual total imports may well exceed 2016’s 1bn-mark at 1.024bn tonnes by the end of 2017.

More imports translate into more tonne-miles to the benefit of freight rates, given that iron ore demand is set to thrive in China during the second half of 2017. As of mid-2017, steel-making demand in China was robust with pig iron output rising by 3.4% year-on-year to 362.56m tonnes between January - June. China’s crude steel production also achieved a record high of 73.23m tonnes in June, up 1.3% month-on-month.

However, traders remain concerned over a supply glut of iron ore and steel that has the potential to overturn the current bullish market feel.

For now, things still look rosy in the panamax market, after rates broke the $10,000 barrier this week. As such, the Panamax time charter average settled at $10,028 on Wednesday, up 4% from $9,635 recorded on Monday.

“With the physical still showing positive signs, we wait to see if there is a push back up at the Panamax market in coming days,” added the FIS panamax broker.

Similar upticks were seen on supramaxes with rates rising slowly as the week drawn by. On Wednesday, spot supramax rates reached $8,738, up 3.6% from Monday, while Handysize rates are kept relatively flat at $7,253 by mid-week, up 1.2% from $7,165 recorded on Monday.

With two price barriers broken in the week, the market has begun to look optimistic over H2 2017. As always, risks lurk behind the scenes with gradual buildup of surplus iron ore due to growing production. In the meantime, all eyes are watching for any signs of cracks on China’s infrastructure construction activities that have sustained the bullish market for so long.