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.
Capesize - USD/Day , USD/Tons - February 12th
⏳ Panamax Market Struggles to Find Support
The Panamax market isn’t faring much better. The Atlantic remains oversupplied, keeping rates in check, while the Pacific is showing some cautious optimism as China starts to increase commodity imports.
Coal and grain shipments into China could provide some stability, but any real rebound will likely be slow and uneven. Owners and charterers alike are keeping a watchful eye on demand trends, hoping for a post-holiday pickup.
Panamax - USD/day , USD/tons - February 12th
Supramax - USD/day , USD/tons - February 12th
📈 Ultramax Market Flooded with New Deliveries
It’s raining Ultramaxes, and not in a good way. The segment is currently seeing its highest monthly influx of newbuilds in eight years, making an already tricky market even tougher.
In January alone, 28 new Ultramax vessels hit the water—the biggest monthly delivery count since 2017. Last year, 192 new Ultramax ships joined the fleet, and with another 200 set to arrive in 2025, supply growth is far outpacing demand.
Not surprisingly, rates are feeling the squeeze. Ultramax spot rates sit at $8,800 per day, up slightly from $7,600 last week, but still well below the $14,200 per day seen a year ago. Many of these vessels were ordered when geared bulkers were flying high, but the market has since softened, leaving owners with thinner margins than expected.
1 Year T/C Dry Bulk
1 Year T/C Dry Bulk
🇺🇸 US Tariffs on Steel & Aluminum: Disruption Ahead?
The US government’s decision to impose 25% tariffs on steel and 10% on aluminum imports has sent ripples through the market. Brazil, which supplies nearly 37% of US seaborne steel imports, is expected to be hit the hardest. Other exporters like South Korea and Vietnam could also face trade shifts if US buyers turn elsewhere.
While tariffs always stir up uncertainty, their impact on the dry bulk market might be more limited than some fear. The US only imports around 21 million tonnes of steel by sea annually, a small fraction of the 255 million tonnes traded globally. Unless major retaliatory measures emerge, the disruption may be manageable.
🌎 Vale’s Expansion & Long-Term Iron Ore Demand
Not all news is gloomy. Vale ( $VALE (+3,92%) ) has announced a $12.2 billion investment to expand its iron ore and copper operations at Carajás—a clear sign that long-term demand remains intact.
This move reinforces confidence in the future of iron ore trade, particularly as China and India continue to drive global demand. While this expansion won’t provide immediate relief, it does suggest that big players still see strength in the market’s core fundamentals.
🚨 Looking Ahead: Will the Market Turn the Corner?
The dry bulk market is navigating choppy waters, with Capesize rates at multi-year lows, an oversupply of Panamax vessels, and a flood of new Ultramax deliveries making recovery a challenge.
However, the next few months will be critical. If China rebounds post-Lunar New Year, we could see some much-needed support for Capesize and Panamax markets. Meanwhile, the impact of US tariffs on steel trade flows will need to be watched closely, as any unexpected shifts could create new opportunities—or further disruptions.
For now, FFAs suggest Q2 could bring some relief, but with supply pressures mounting, owners will need to tread carefully.
💬 Let’s Connect!
What’s your take on the dry bulk market? Will Capesize rates recover, or are we in for a prolonged slump? Share your thoughts in the comments below! 🚢
