In February 2016, BDI (Baltic Dry Index) after hitting an all-time low of just 290 points, the Baltic Dry Index has put in a sustained rally to break above 700 in May 2016. Dry bulk shipping market may be breathing a sigh of relief that the market pain has been eased a little bit, dry bulk operators and shipowners will all be well aware this is no moment for hasty celebrations. Cape size spot market rates have now risen to around $8,000 per day which is at or even below break-even levels. Dry bulk shipping bounced due to unexpected surge in Chinese steel prices and resulting iron ore demand. Iron ore price has hit a 15-month high and spike in speculative trading on steel and iron ore distorted the market. Arguments between bears and bulls, are raging over the real position of China’s economy and its impact on global commodities demand. Bulls argue the current trade slowdown is cyclical rather than structural, and demand will recover sooner than expected. If ship demolition rate is maintained through the year it would total 7.2% of the world fleet will be scrapped in 2016 which would be a record.