- Capesize vessel sale and purchase (S&P) activity dropped by nearly 48% in early 2025.
- High asset prices and low freight rates are discouraging transactions.
- Shipowners are holding onto tonnage as uncertainty clouds fleet renewal plans.
The Capesize segment of the dry bulk Sale & Purchase (S&P) market experienced a sharp contraction in early 2025, with transaction volumes plunging by around 48%, reports VV Blog.
This drop marks a significant pullback from the more active pace seen in late 2024, and reflects growing hesitation among shipowners and investors as market conditions shift.
Dramatic rise in second-hand vessel prices
One of the primary reasons behind the slowdown is the dramatic rise in second-hand vessel prices. The value of five-year-old Capesize bulkers climbed by 25% over the past year, while 10-year-old vessels saw their prices increase by almost 40%. While this surge in asset value is beneficial for current owners looking to sell, it has deterred many potential buyers who are unwilling to pay such high premiums in a weakening freight environment.
Adding to the reluctance is the “wait and see” sentiment among owners. With high newbuilding prices and extended delivery schedules, many operators are choosing to hold onto their existing ships rather than trade them. The expectation that second-hand prices may cool off has led some buyers to delay purchases in hopes of securing better deals later in the year.
Weaker freight earnings have also played a role. Capesize spot market rates, which averaged around $22,000 per day in early 2024, have fallen to roughly $12,000 per day in 2025. This softening of the market makes it harder for buyers to justify premium purchase prices, especially when short-term earnings potential is uncertain.
Robust demand for raw materials
Despite the overall decline in activity, select buyers remain engaged. Chinese operators have been particularly active over the past year, supported by robust demand for raw materials. European buyers, including Greek shipping firms, are still exploring opportunities for mid-life tonnage that may offer stable returns in the medium term.
Looking ahead, any rebound in S&P activity will likely depend on stabilization in the freight market. If demand for iron ore and bauxite transportation picks up, spot rates may recover, boosting buyer confidence. Until then, high prices, tighter financing conditions, and cautious sentiment are expected to keep Capesize transactions relatively muted.
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Source: VV Blog
