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A Market of Gentle Tides: Small Shifts in Dry Bulk

By Iakovos (Jack) Archontakis
Senior Maritime Strategy Consultant-Chartering Executive & TMC Shipping Commercial Director

and

Dr Fotios-Evangelos Karlis
Maritime Executive & Shipping Consultant

The dry bulk market continued to sail through a week of modest variations, with the smaller segments finding firmer ground while the larger sizes came under pressure compared with the previous week. The movement was measured rather than dramatic, yet beneath the surface, the different vessel classes followed distinctly different currents.

Capes declined by 5.13%, Kamsarmaxes by 6.47%, while Ultramaxes and Handies advanced by 2.79% and 5.07%, respectively, on a weekly basis. As a result, the Baltic Dry Index (BDI) shed 137 points over the week, closing at 3,370 points on Friday, 18 September.

Let us take a closer look at the course of the dry bulk market by vessel size and geographical region, beginning with the Capes.

Capesize — The Cape Trade Finds Its Bearings

In Asia, losses were recorded mainly during the first half of the week, as the number of available vessels far outstripped the volume of fresh business entering the market. As the week progressed, however, freight levels began to find their footing, with rates stabilising as the market approached the weekend. The index on the Australia–China route (C5) closed on Friday at $16.58 per tonne.

In the Atlantic, the market showed greater resilience, with the South increasing its fixing volume towards the end of the week. In the North, too, a recovery in fixtures for Asia-bound voyages became evident, with business concluded at higher levels. On Friday, the indices stood at $42.96 per tonne for the Brazil–China route (C3), while rates for Europe–Asia voyages closed at $87.33 thousand per day (C9), and transatlantic round voyages at $54.75 thousand per day (C8).

Kamsarmax — A Fleet Under Pressure

In the Atlantic, the market remained under pressure in both the North and the South, as a number of cargoes absorbed part of the available tonnage but failed to generate enough momentum to alter the broader market picture. Indicatively, rates for voyages from the East Coast of South America (ECSA) to the Far East settled at $19–21 thousand per day, basis delivery in Asia; Europe–Asia voyages were assessed at $29.5–31.5 thousand per day, basis delivery in Europe; while transatlantic round voyages ranged between $18–20 thousand per day, basis delivery Gibraltar.

In Asia, the market softened across most routes despite a satisfactory flow of cargo. A number of cargoes emerged for India, along with several tenders for Japan and Korea, yet these were insufficient to reverse the prevailing negative trend. Rates for round voyages within Southeast Asia and the Far East ranged between $16.5–18.5 thousand per day, basis delivery Far East.

Ultramax — A Rising Tide Across Several Basins

In Southeast Asia, the market moved higher, supported by coal and clinker voyages, which absorbed a substantial portion of the available tonnage. Ultramax rates for voyages between Southeast Asia and the Far East settled at $18.5–20 thousand per day.

Further north, in the Far East, the market brought the week to a positive close, as backhaul employment, particularly towards the US Gulf and the Mediterranean, attracted increased interest. Ultramax rates for round voyages in the NOPAC stood at $19.5–21 thousand per day, while voyages to India were fixed at $22.5–24 thousand per day and backhaul voyages towards the Atlantic at $17.5–19 thousand per day.

In the Middle East Gulf and West Coast India, the market advanced as backhaul voyages from West Coast India and South Africa showed a satisfactory flow of cargo. In contrast, business heading towards the Far East remained limited. Rates for Far East voyages ranged between $15.5–17 thousand per day, basis delivery WCI.

In the Atlantic, and particularly in the US Gulf, the market began the week at a slow pace. As the days unfolded, however, a flow of cargo emerged for both transatlantic and Asia-bound voyages, lifting freight levels in its wake. Ultramax rates for transatlantic voyages settled at $31.5–33 thousand per day, while Asia-bound rates stood at $32.5–34 thousand per day.

The ECSA region also showed improvement, with a notable increase in demand in both the North and the South. At the same time, available tonnage declined. Rates for voyages to Southeast Asia and China settled at $34.5–36 thousand per day, while transatlantic voyages to the Mediterranean and Europe were also assessed at $34.5–36 thousand per day.

The European market opened the week with limited activity. Yet as the number of available vessels declined and the flow of cargo increased, the numbers began to improve. Rates for local round voyages moved within the $22.5–24 thousand per day range, while scrap voyages to the Mediterranean were fixed at $28.5–30 thousand per day and voyages to Asia at $29.5–31 thousand per day.

The Mediterranean moved higher as the balance between supply and demand tilted towards owners. Indicatively, an Ultramax trading from the Mediterranean to Asia was fixed at $25–26.5 thousand per day, basis delivery Canakkale; rates towards the other side of the Atlantic stood at $13.5–15 thousand per day, while intra-Mediterranean voyages were assessed at $17.5–19 thousand per day, excluding war zones.

Handysize — Smaller Tonnage, Firmer Winds

In Europe, the market posted notable gains, driven by tighter vessel supply and scrap cargoes being fixed at satisfactory levels. Rates for the larger vessels within the segment settled at $16.5–18 thousand per day for round voyages, $29.5–31 thousand per day for scrap voyages to the Mediterranean, and $14–15.5 thousand per day for transatlantic voyages.

The Mediterranean began the week with a strong showing, supported by backhaul voyages commanding firmer freight. The improved tone in Northern Europe also fed positively into the Mediterranean market. Rates for the larger vessels in the segment, above 36,000 dwt, stood at $13–14.5 thousand per day for intra-Mediterranean voyages, $11–12.5 thousand per day for voyages to Europe, $11.5–13 thousand per day for voyages towards the other side of the Atlantic, and $16–17.5 thousand per day for Asia-bound voyages, basis delivery Canakkale.

In the US Gulf, the market continued along the upward course established during the previous week, offering owners a broad range of employment opportunities across the various routes. Rates for the larger vessels in the segment reached $25.5–27 thousand per day for voyages towards the other side of the Atlantic and $19.5–21 thousand per day for voyages to Asia.

The East Coast of South America (ECSA) also moved higher. The principal engine behind the advance was demand for Asia-bound voyages, followed by transatlantic routes. Rates for transatlantic voyages to Europe and the Mediterranean settled at $25.5–27 thousand per day, while voyages to Asia were fixed at $24–25.5 thousand per day.

In Asia, and particularly in the North, the market retained its momentum. Some charterers chose to move early in order to cover their requirements ahead of the approaching holidays in Japan and China—the third Monday of September in Japan, and 20 and 25–27 September in China. In the South, the market remained broadly balanced, with no significant changes in freight levels.

Further west, in India, attention centred on steel cargoes moving from India to Europe and the US Gulf. Voyages to China, however, remained limited. Rates for the larger Handies on round voyages in the Far East and NOPAC stood at $18–19.5 thousand per day, while Southeast Asia–China voyages were assessed at $17.5–19 thousand per day and West Coast India–China voyages at $9.5–11 thousand per day.

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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 are the sole responsibility of the reader.