The dry bulk market has kicked off 2025 on shaky ground. Capesize rates are hovering near two-year lows, battered by cyclone disruptions in Australia and an oversupply of tonnage in the Atlantic. Meanwhile, the Ultramax segment is seeing a flood of new deliveries, adding further pressure to an already fragile market.
To make things even more interesting, the US has announced new tariffs on steel and aluminum, raising concerns over potential shifts in trade flows. While the Futures Market suggests a recovery could be on the horizon, uncertainty remains high.
For now, sentiment across most segments remains weak—but as always, opportunities lie in the volatility.
⏬ Capesize Market Plunges as Australian Weather Woes Persist
The Capesize segment has been hit hard, with the Baltic Exchange’s average spot rate tumbling to $5,900 per day—a staggering 50.9% drop from last month. This puts rates uncomfortably close to the 2023 low of $5,815 per day, sparking concerns about how long the market will take to recover.
In the Pacific, extreme weather has wreaked havoc on iron ore shipments. Port Hedland—the world’s largest iron ore export hub—was forced to shut down once again due to cyclone activity. With major miners like Rio Tinto temporarily halting operations, Australian iron ore exports have slipped 2.8% year-on-year.
The Atlantic is facing its own battle. A surge in ballasters—including VLOCs, Newcastlemaxes, and standard Capes—has created an oversupply problem, making it tough for rates to gain traction. That said, Brazilian iron ore exports are holding steady, down just 0.4% year-on-year in January. Meanwhile, Guinea’s bauxite exports have soared by 50%, adding some much-needed cargo demand for larger vessels.
Looking ahead, there’s a glimmer of hope. FFAs for March are trading at $12,000 per day, and Q2 contracts are hovering in the $17,400-$17,700 range. If China ramps up demand post-Lunar New Year, we could see some relief. But for now, the market remains under pressure.
