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Dry Bulk Market Surges Higher as Panamaxes Lead the Rally with Double-Digit Gains

By Iakovos (Jack) Archontakis

Senior Maritime Strategy Consultant - Chartering Executive & TMC Shipping  Commercial Director

and

Dr. Fotios-Evangelos Karlis
Maritime Executive & Shipping Consultant

The freight market moved upward for yet another week across all vessel segments, with Panamaxes standing out after posting double-digit gains compared to the previous week. Let us take a closer look at how the freight market evolved by vessel size and region. More specifically, Capes rose by 4.40%, Kamsarmaxes by 12.9%, Ultramaxes (63) by 2.84%, and Handies by 2.03% compared to the previous week. As a result, the BDI increased by 173 points week-on-week, closing at 3,151 points on Friday, May 15.

Let us now examine in greater detail how the dry bulk market performed over the past week by vessel segment, beginning with the CAPEs. In Asia, the week started on a relatively quiet note. However, the presence of major mining companies throughout the week strengthened freight rates. The week eventually closed with slight corrections. On Friday, the index levels on the Australia–China route (C5) closed at $15.01/tn.

In the Atlantic, both the northern and southern regions posted gains, as activity and demand continued to rise steadily, absorbing a significant portion of the available tonnage. In the north in particular, transatlantic voyages acted as the main driver of the market. By Friday, rates for voyages from Brazil to China reached $36.8/tn on the C3 route, while rates from Europe to Asia closed at $78.88K/day on the C9 route, and transatlantic round voyages reached $55.99K/day on the C8 route.

Turning to the Kamsarmaxes, in the Atlantic the shortage of available tonnage, coupled with increased grain exports to Asia and stronger mineral demand, pushed rates higher in both the north and the south. By contrast, transatlantic voyages were not the market’s centerpiece. Indicatively, rates for voyages from the East Coast South America (ECSA) to the Far East climbed to $25–27K/day (delivery Asia), from Europe to Asia to $30–32K/day (delivery Europe), while transatlantic round voyages stood at $16–18K/day (delivery Gibraltar).

On the other hand, in Asia, the steady flow of mineral cargoes from Indonesia and Australia, combined with grain shipments from the North Pacific, provided substantial support to the market. At the same time, period charter activity intensified considerably. Rates for round voyages in Southeast Asia–Far East trades moved at $24–26K/day (delivery Far East).

As for the Ultramaxes, Southeast Asia displayed a similar picture to the northern region, as market sentiment remained positive while supply and demand stayed balanced. UMX rates for voyages between Southeast Asia and the Far East were assessed at $18.5–20K/day. Further north, in the Far East, the market began the week dynamically, with a steady flow of cargoes during the first few days before momentum gradually softened. Only backhaul voyages attracted notable interest from shipowners. UMX rates for North Pacific round voyages (NOPAC) stood at $17–18.5K/day, for voyages to India at $22.5–24K/day, and for backhaul trips to the Atlantic (BH) at $16.5–18K/day.

In the Middle East Gulf and West Coast India, the market generally remained subdued, with only a limited number of fresh cargoes mainly destined for the Far East during the second half of May. Activity out of Oman was likewise restricted. UMX rates for voyages to the Far East ranged between $13.5–15K/day (from West Coast India – WCI).

In the Atlantic, and particularly in the U.S. Gulf, the market strengthened on most routes, although the week began slowly. Nevertheless, momentum accelerated as the days passed. UMX rates for transatlantic voyages reached $29.5–31K/day, while voyages to Asia achieved $24–25.5K/day. The ECSA region regained upward momentum as numerous fresh cargoes emerged for late May loading. Larger vessels within the segment continued competing aggressively with Panamaxes, successfully securing cargoes and consequently lifting the smaller vessels of the sector as well. UMX rates for voyages to Southeast Asia–China rose to $33.5–35K/day, while transatlantic voyages to the Mediterranean/Europe traded at $28–29.5K/day.

Europe remained quiet during the first days of the week due to the shortage of fresh cargoes. As the week progressed, no major changes were recorded. Vessel supply remained steady, although owners’ options were limited. UMX rates for local round voyages ranged between $17.5–19K/day, for scrap cargoes to the Mediterranean between $19.5–21K/day, and for voyages to Asia between $19–20.5K/day. The Mediterranean showed signs of recovery, with charterers increasing their bids in the western basin. Conversely, the eastern Mediterranean moved at a slower pace. Indicatively, a UMX for a voyage from the Mediterranean to Asia was fixed at $19.5–21K/day (delivery Canakkale), to the opposite side of the Atlantic at $7.5–9K/day, and within the Mediterranean at $11.5–13K/day (excluding war-risk zones).

In the Handysize market, Europe remained unchanged throughout the week, as the oversupply of vessels continued to pressure freight rates. Rates for the larger vessels of the segment for round voyages reached $12.5–14K/day, scrap cargoes to the Mediterranean were fixed at $14.5–16K/day, and transatlantic voyages at $8–9.5K/day. The Mediterranean remained highly challenging for shipowners, with weak demand and a limited number of concluded fixtures. Only voyages toward Asia and South Africa generated notable interest. Rates for the larger vessels of the segment (above 36K DWT) for Mediterranean voyages ranged between $7.5–9K/day (delivery Canakkale), toward Europe at $7–8.5K/day (delivery Canakkale), toward the opposite side of the Atlantic at $6.5–8K/day (delivery Canakkale), and toward Asia at $12–13.5K/day.

Across the Atlantic, in the U.S. Gulf, the market began the week with healthy activity; however, this was not reflected in freight levels, which remained largely unchanged. Indicatively, rates for the larger vessels of the segment toward the opposite side of the Atlantic ranged between $15–16.5K/day, while voyages to Asia were fixed at $16–17.5K/day. Meanwhile, the East Coast South America (ECSA) region came under pressure from vessel oversupply, as numerous ships from the northern and western coasts of South America, the western Mediterranean, and West Africa repositioned into the area. Consequently, rates for larger vessels from ECSA for transatlantic voyages to Europe–Mediterranean moved at $21–22.5K/day, while voyages to Asia stood at $20.5–22K/day.

In Asia, both the northern and southern regions experienced stronger demand driven by fresh cargoes, pushing freight rates to higher levels. Further west, in the Middle East Gulf and India, the market remained stable, as supply and demand stayed in balance. Rates for the larger vessels of the segment for round voyages in the Far East and NOPAC closed at $17–18.5K/day, from Southeast Asia to China at $16.5–18K/day, and from West India to China at $9.5–11K/day.

Legal Disclaimer : This report is provided solely for general informational purposes and does not constitute investment or commercial advice. The information herein is based on sources believed to be reliable but is not guaranteed for accuracy or completeness. Any actions taken based on this content remain the sole responsibility of the reader.