The seasonal surge in iron ore shipments in the second quarter of 2015 may provide some relief for the battered Capesize sector.

As bunker prices rose, shipowners pushed for higher rates, resulting in average Capesize rates climbing to US$6,976 per day on May 13, up from US$4,530 a week ago. However, that is still insufficient to cover operating costs.

US dry bulk consultancy Commodore Research said, "Brazilian and Australian iron ore production and shipments are very seasonal and the second half of every year sees very large increases.

"This will lead to the global iron ore market being further flooded with iron ore later this year. This will be very negative for iron ore prices, but the increase in volume is very positive for the Capesize market," US dry bulk consultancy Commodore Research said.

Commodore Research believes that ramped-up production from major exporters in Brazil and Australia during the second quarter will far exceed any production declines from smaller global exporters.

Brazilian exports, in particular, are set to jump and this remains vital for Capesize tonne-mile demand.

Brazilian iron ore exports rose by 30.9 million tonnes, 20% higher year on year (y/y), during the second half of 2014.

This year, the Anglo American's Minas Rio mine is finally producing in earnest. Around 12 million tonnes of iron ore is forecast to be exported from Minas Rio this year, compared to less than 1 million tonnes exported in 2014. In addition, exports from Australia's 'big three' miners (BHP Billiton, Rio Tinto, and FMG) rose in the second half of 2014 by 40.3 million tonnes, up 12% y/y and similar seasonality is expected this year.

Exports from the new Roy Hill mine in September would also finally start in September and approximately 9 million tonnes of iron ore has already been mined there and is waiting to be shipped.