News in English

The dry bulk freight market has experienced significant declines in rates across various vessel sizes

The dry bulk freight market has experienced significant declines in rates across various vessel sizes since November 2024. According to the Baltic Exchange Timecharter equivalents, the rates have fallen by 56% for Capesize, 18% for Kamsarmax, 20% for Panamax, 54% for Supramax, and 48% for Handysize vessels. However, when examining historical trends from 2018 to 2024, seasonality plays a significant role in these fluctuations. Every year, from the 4th to the 12th week, the market has shown an upward movement across the Kamsarmax, Panamax, Supramax, and Handysize sectors. Interestingly, the Capesize market exhibited a different pattern, with rates falling from 2018 to 2021, but rebounding in 2023 and 2024. This market behavior can be attributed to the concentration of Capesize vessels in the hands of a few players, making its seasonality distinct from the other vessel types. Also Bauxite has now surpassed coal as the second-largest driver of shipping demand for Capesizes, reshaping the bulk carrier market. The growth in West African bauxite trade has helped mitigate seasonal fluctuations in the Capesize sector by balancing Brazilian iron ore shipments. With the conclusion of China's Lunar New Year celebrations, the likelihood of increased Chinese coal and iron imports/exports grows, alongside a typical uptick in grain imports between the 8th and 24th week. This suggests a potential rebound in dry bulk rates as Chinese industrial activity resumes and trade flows increase. Given China's dominance in the dry bulk sector, accounting for approximately 50% of global seaborne trade, this rebound could positively impact market conditions.

The Trump administration's foreign policy, particularly its approach to sanctions, is set to also have a significant impact on global trade, including freight rates. The sanctions on Iran, imposed through the Office of Foreign Assets Control (OFAC), are one such example. In its first major sanctions move, the Trump administration blacklisted key players involved in the shipment of Iranian crude, including shipowners, managers, and even a VLCC captain. This move, part of the broader "maximum pressure" strategy, targets a network facilitating Iran's oil shipments to China. The sanctions blacklist now includes three tankers accused of moving Iranian crude, one of which was reportedly lifting oil from storage in China. The Trump administration's sanctions reflect a more aggressive stance towards Iran, aiming to halt its oil trade and disrupt its nuclear and ballistic missile programs. The sanctions target the "shadow fleet" of tankers that continue to trade Iranian crude, which has been a point of tension in global markets. With shipping companies and managers in India, Seychelles, and Hong Kong also named in the sanctions list, it is clear that the US is focusing on global logistics and maritime trade as part of its economic warfare strategy against Tehran.

However, this isn't the only sanction-related factor influencing freight rates. The Trump administration has also had a complicated relationship with neighbouring countries like Mexico and Canada. Despite strong rhetoric about trade and tariffs, Trump delayed the imposition of new sanctions on these nations for about a month, indicating a degree of flexibility in his approach. This delay has left businesses, particularly in the logistics and freight industries, in a state of uncertainty. Sanctions, whether imposed or postponed, have a direct effect on shipping routes, freight rates, and international trade logistics. Any sudden tariff hike or sanctions could significantly disrupt the flow of goods between the US and its neighbours, shifting the trade patterns and routes, increasing the tonne miles demand and consequently the supply of vessels.

S&P activity:

Dry:

On the Capesize sector, Chinese buyers acquired the "Cape Hawk" - 177K/2006 Namura and the "Cape Heron" - 178K/2005 Mitsui for USD 30 mills enbloc. The Supramax "River Globe" - 54K/2007 Yangzhou Dayang changed hands for USD 8.5 mills. On the Handysize sector, the "Unity North" - 38K/2015 Oshima found new owners for high USD 16 mills, while the OHBS "Es Kure" - 33K/2012 Kanda Zosensho was sold for USD 12.9 mills to Vietnamese buyers.

Wet:

On the VLCC sector, the Scrubber fitted "FPMC C Intelligence" - 302K/2010 IHI was sold for high USD 40's mills to Chinese buyers. On the Suezmax sector, the "Jiaolong Spirit" - 159K/2009 Bohai, the "Dilong Spirit" - 159K/2009 Bohai, the "Shenlong Spirit" - 159K/2009 Bohai and the "Tianlong Spirit"- 159K/2009 Bohai were sold for region USD 35 mills each to Greek buyers. The MR1 "Sunny Star"- 38K/2010 HMD was also sold to Greek buyers for USD 17.5 mills. Finally, the Small tanker "Alma Marine" - 9K/2010 Titan Quanzhou was sold for USD 8.5 mills to Turkish buyers.

Xclusiv Shipbrokers Inc.