- Dry bulk shipping faces a more subdued environment compared to mid-2024, with earnings and asset values sliding across most vessel segments.
- Key drivers include weaker Chinese iron ore and coal imports, falling steel output, and a soft global macroeconomic outlook affecting minor bulk demand.
- While Capesizes have shown resilience due to a brief rally, the market remains fragmented as trade flow imbalances and commodity-specific pressures take hold.
The twenty-fifth trading week of 2025 closed on a notably softer tone than the same period last year. In mid-2024, the Baltic Dry Index (BDI) hovered just below the 2,000-point mark, fueled by optimism across all vessel classes. Capesize earnings topped $26,000 per day, while Supramax and Handysize rates also trended higher. Even Kamsarmaxes—then showing some caution—performed better than current levels. The market then was riding a seasonal high, outpacing 2023 averages, according to Breakwave Advisors.
Fast forward a year, and the picture has changed. The gearless Capesize and Panamax indices slipped to $23,879 and $12,151 per day, respectively. Geared segments like Supramax and Handysize closed slightly higher at $12,305 and $11,224, though the broader theme remains one of softening. Only Capesizes have managed to retain some momentum, thanks to a short-lived June rally.
China’s Iron Ore Volumes Slump, Capesize Rebound Falters
Between January and May 2025, China imported 486.41 million tonnes of iron ore—a 5.2% decline year-on-year. May discharges dipped below 100 million tonnes, down from April and from May 2024 levels. However, June may bring a temporary boost, with forecasts from LSEG and Kpler suggesting a rebound to nearly 110 million tonnes.
Despite this recovery, Capesize average earnings year-to-date remain underwhelming at $15,540 per day, far short of the $23,329 recorded over the same period in 2024. Asset values reflect this moderation, with modern eco Capesizes currently assessed at $62.5 million—a 2.5% year-on-year drop.
Coal Weakness Drags Down Panamax and Kamsarmax Sectors
The Panamax and Kamsarmax markets have been notably weighed down by collapsing coal demand. China’s coal imports from January to May totaled 188.7 million tonnes, marking an 8% annual decline. May volumes alone dropped 18% year-on-year, driven by weak import incentives amid low domestic prices.
Kamsarmaxes have averaged just $10,587 per day in 2025, a sharp $5,400 decline from last year. Consequently, vessel values have plummeted: modern eco Kamsarmaxes are now priced at $30 million, down 20% year-on-year.
Grains Offer Limited Relief
While coal underperformed, grain volumes offered some respite. China’s soybean imports surged to a record 13.92 million tonnes in May, rebounding from a 10-year low in April. The first five months of 2025 totaled 37.11 million tonnes. Brazil is also expected to deliver 12.5 million tonnes in June. Yet, these gains were insufficient to reverse broader market weakness.
Steel Exports Steady, Domestic Output Falls
On the steel front, China’s export performance has remained robust, hitting 10.58 million tonnes in May, up 10% year-on-year. Cumulative exports for 2025 stand at 48.47 million tonnes, the highest on record for this period. However, domestic crude steel production is falling. May output dropped 6.9% year-on-year to 85.55 million tonnes, with total production down 1.7% for the year so far. A 4% annual decline is now projected.
This uneven steel outlook has impacted Ultramax rates, which are averaging $11,174 per day in 2025, down 31% from 2024. Vessel values have followed suit, falling 17% year-on-year to $30 million.
Minor Bulks and Macro Outlook Weigh on Handysize Market
Minor bulks, often closely tied to global GDP, have underperformed amid a weaker macroeconomic backdrop. BIMCO has revised down its global minor bulk growth forecast to 1–2% for 2025 and 2–3% for 2026. Tariffs and soft demand in China and the U.S. have been cited as primary drags.
Handysize earnings have declined accordingly, averaging $9,733 per day—a 22% fall from 2024 levels. Asset values have adjusted, with modern eco Handysize vessels now assessed at $24 million, reflecting a 14% year-on-year drop.
Fragmentation Replaces Broad-Based Gains
Compared to the broad strength seen a year ago, today’s dry bulk landscape is far more fragmented. While Capesizes remain relatively steady, other segments have seen sharp corrections in both earnings and asset prices. As the second half of 2025 unfolds, the trajectory will likely depend on whether key commodity flows can regain strength.
The market is searching for direction amid diverging performance by size class and region. If trade flows remain unbalanced, the dry bulk sector may continue to struggle with volatility rather than benefit from the cohesive uptrend that defined mid-2024.
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Source: Breakwave Advisors
