Journalists call the August holiday period the “silly season” because there is often nothing to write about and the creative imagination kicks in.

When I worked on the London Evening Standard many moons ago, a reporter friend brought in a photograph of a frog in his garden taken very close up.

We all laughed and used the picture in the paper. The story was embellished the further round the world it went: “London invaded by giant toads” was a typical headline.

We don’t have to “embellish” stories here though: in recent days there has been a massive slump in large bulker rates, warnings from a leading ship operator about demand destruction and disturbing economic data coming out of China.

Tanker markets may be booming but will this upturn be short-lived with rough times round the corner and upsets looming, such as the 43% slump in capesize rates seen last week?

Certainly one bulker-heavy company — Norden — is firming its grip on the handrail by ensuring that its 345 dry-vessel fleet is on time charter until 2023.

“If we do see an economic downturn or recession, then clearly demand for other dry bulk commodities — iron ore, steel, bauxite, aluminium and so on … will see declining demand,” Norden chief executive Jan Rindbo told my colleague, Holly Birkett, recently.

Norden has been benefiting like other dry bulk operators from powerful rate levels earlier in the year. The Danish company has just turned a $32m second-quarter profit in 2021 into $179m earnings this time around.

But the Chinese economy is definitely having a wobble. Central bankers there have just bucked a global trend by cutting rather than raising central bank lending rates for fear it will further stall this key engine of global growth.

Chinese retail sales, industrial output and investment all slowed last month and failed to match economists’ expectations. Continued Covid-19 lockdowns and a deepening property crisis have been heavily depressing business confidence — and activity.

There are fears that key capesize carryings such as iron ore and coking coal will continue to be less in demand unless the Chinese government itself steps in to boost spending on infrastructure. The $300bn debts of Chinese property giant Evergrande still command attention, as do buyers refusing to pay mortgages on unbuilt homes.

Some shipping analysts expect a dry bulk rates upturn in the autumn, but Chris Robertson at Deutsche Bank told my colleague, Michael Juliano, that “there is ongoing fear of a global economic slowdown, which would negatively impact minor bulk demand and mid-sized rates … Clearly, the market is pricing in low charter estimates, but it’s not based on irrational fear”.

And a quick glance around a range of economies shows it is not a pretty picture worldwide. The UK is facing the highest inflation level for 40 years while real wages dropped at record levels amid talk of property crashes and an economic slump. Chile is teetering on the brink of recession, while Turkey cut interest rates even as its inflation rate hit a 24-year high.

The recent dive in capesize rates was largely attributed by Clarksons Research to China, with some areas coming out of lockdowns allowing more ports to function properly. In April, around 36% of the world’s bulk carriers were tied up in docks somewhere, but this number has now dropped to just above 30%.

Still, the Baltic Exchange Capesize 5TC index, which monitors spot rates across five different routes, had dropped from $24,000 per day in a little over a month to $7,000 per day as measured at the end of last week. On Monday and Tuesday this week, the index was down further.

Barring an implosion of the Chinese economy, Clarksons is confident that the wider bulker trade will improve in the second half, boosted not least by the resumption of grain shipments out of Ukraine. There was better news on this front, with Lloyd’s underwriter Ascot Insurance and broker Marsh tying up what it claims to be the first cargo war risk cover for humanitarian food shipments from the war-torn country on the Black Sea.

The loss of grain exports from Ukraine combined with heatwaves and declining Chinese imports led to a 5.2% slump in the first half of the year, according to Paris-based broker Barry Rogliano Salles. But a bounceback is predicted for the last six months leading to a full year tally, up 1% year-on-year. Is it silly to be optimistic?