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Dry Bulk Market Pulls Back After Rally as Capes Lead the Correction

By Iakovos (Jack) Archontakis

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

and
Dr. Fotios-Evangelos Karlis
Maritime Executive & Shipping Consultant

After three consecutive weeks of gains, the dry bulk market shifted into correction mode, posting a sharp week-on-week decline of approximately 10.5%. As is often the case during market pullbacks, pressure was most pronounced in the larger vessel segments, while smaller sizes demonstrated selective resilience and modest upside.

Capesize rates recorded the steepest losses, down 16.79%, followed by a 5.22% decline in the Kamsarmax segment. In contrast, Ultramax (63) and Handysize vessels moved against the broader trend, registering weekly gains of 3.47% and 3.22% respectively. Reflecting this reversal, the Baltic Dry Index (BDI) fell by 225 points week-on-week, closing at 1,923 points on Friday, 6 February.

Capesize: Early Optimism Fades Quickly

In Asia, the Capesize market began the week with a constructive tone, supported by increased activity from West Australian miners. Initial optimism, however, proved short-lived. Freight rates on the key C5 route (Australia–China) lost more than USD 1 per tonne, with the index closing the week at USD 8.44/tonne.

Across the Atlantic basin, activity remained subdued in both the north and south. The lack of fresh cargoes weighed on sentiment, although a gradual tightening of tonnage availability in the North Atlantic toward the end of the week provided limited support. By Friday, Brazil–China (C3) rates stood at USD 23.2/tonne, while earnings on the Europe–Asia route (C9) reached USD 52.39k/day. Transatlantic round voyages (C8) closed at USD 32.69k/day.

Kamsarmax: Asian Demand Provides a Floor

In the North Atlantic, the Kamsarmax market relied heavily on eastbound cargoes to Asia, as transatlantic demand remained thin. Coal shipments to Japan and India attracted particular attention, while additional support came from the fragmentation of Capesize cargoes into smaller stems.

Conditions were weaker in the South Atlantic, where rising tonnage supply shifted negotiating power firmly toward charterers. Indicatively, East Coast South America (ECSA) to Far East voyages were fixed at USD 16–18k/day (delivery Asia), Europe–Asia trips at USD 21.5–23.5k/day, and transatlantic round voyages at USD 15–17k/day.

In Asia, the market opened cautiously amid Indonesian coal production restrictions. Activity improved toward the end of the week, though overall momentum remained muted, particularly in the North Pacific and Australia. Southeast Asia–Far East round voyages were concluded in the USD 14–16k/day range.

Ultramax: Selective Strength Across Regions

In Southeast Asia, Ultramax activity remained relatively quiet, with a visible gap between owners’ and charterers’ expectations. Rates for intra-SEA to Far East voyages hovered at USD 9–10.5k/day.

Further north, the Far East market softened initially due to limited alternatives from the North Pacific and a lack of backhaul options. However, growing tonnage concentration eventually lent support to specific routes. North Pacific (NOPAC) round voyages improved to USD 9.5–11k/day, voyages to India fixed at USD 10–11.5k/day, and backhaul trips to the Atlantic reached USD 10.5–12k/day.

In the Arabian Gulf and West Coast India, conditions remained broadly stable. Owners focused on potential cargoes from South Africa, with Far East-bound voyages fixing at USD 10.5–12k/day. Short AG–WCI trips traded at USD 11–12.5k/day, while Atlantic-bound business lagged at USD 8.5–10k/day.

The US Gulf emerged as one of the stronger Ultramax regions, driven by limited tonnage availability. Transatlantic voyages climbed to USD 23.5–25k/day, while Asia-bound fixtures reached USD 25–26.5k/day. In contrast, the ECSA market showed mixed signals, with modest declines on certain routes despite healthy demand from the Americas and quieter conditions in West Africa.

Europe experienced limited activity, as demand for the first half of February remained subdued. Rising tonnage lists pressured rates, prompting some owners to consider positioning vessels across the Atlantic. In the Mediterranean, the market held steady, with participants adopting a wait-and-see approach.

Handysize: Diverging Regional Performance

In Europe, the Handysize sector maintained positive momentum, offering attractive opportunities for well-positioned vessels. Larger units achieved USD 12.5–14k/day on round voyages, USD 15–16.5k/day for scrap cargoes to the Mediterranean, and USD 8.5–10k/day on transatlantic runs.

The Mediterranean, however, remained under pressure due to oversupply and a lack of fresh cargoes. For vessels above 36,000 dwt, intra-Med rates softened to USD 6–7.5k/day, while Europe- and Atlantic-bound voyages struggled to gain traction.

Across the Atlantic, the US Gulf market improved midweek as charterers’ options narrowed, allowing owners to push rate ideas higher. Although activity slowed toward the end of the week, earnings remained elevated. East Coast South America showed upward momentum, with uncovered cargoes and limited tonnage in West Africa supporting the market. Transatlantic fixtures from ECSA reached USD 17–18.5k/day, while Asia-bound voyages fixed at USD 17.5–19k/day.

In Asia, particularly in the northern regions, Handysize rates softened despite a perceived tightening of supply and some support from backhaul demand. Australia stood out in the south with fresh cargo flow, while the Arabian Gulf continued to trend lower as vessel lists gradually expanded.

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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.