Recent market observations suggest shifting dynamics in the Capesize freight market, driven by changes in iron ore stockpiles, vessel repositioning, and freight rate fluctuations.
Key Market Insights
1. Iron Ore Stockpiles & Freight Demand
- China’s major ports recorded a 529,900-tonne (0.3%) decline in iron ore inventories, totaling 153.4 million tonnes as of February 20.
- Despite rising import volumes, stockpile drawdowns indicate reduced demand for fresh shipments, affecting freight activity.
- Increased reliance on stored inventory has led to a decrease in new shipment demand, impacting vessel movements and freight rates.
2. Capesize Market Impact
- Reduced demand for fresh shipments has led to higher ballaster activity, with more vessels repositioning due to lower freight demand.
- Freight rate pressure: With more ships available but fewer new shipments, freight rates may face downward pressure.
- South Atlantic ballaster activity declined 5% from recent highs but remains above early-year levels.
3. Freight Rate Movements (Week 09, 2025)
- Capesize (Brazil to North China): Rates rebounded to $18 per tonne, recovering from $17 per tonne in prior weeks.
- Panamax (Continent to Far East): Rates edged up to $30 per tonne.
- Supramax (Indo-ECI Route): Rates climbed to nearly $9 per tonne, continuing an upward trend.
- Handysize (NOPAC Far East): Rates surged 15% month-over-month, nearing $30 per tonne.
4. Vessel Supply Adjustments
- Capesize SE Africa: Vessel count at 130, down 20 from last week, but 30 above early-year levels.
- Panamax SE Africa: Vessel numbers dropped to 150, marking a 30-vessel decline.
- Supramax SE Asia: Slight drop below the annual average of 98, suggesting continued downward momentum.
- Handysize NOPAC: Vessel count dipped below the annual trend of 27, confirming recent downward revisions.
5. Port Congestion Trends
- Capesize congestion at Chinese ports fell below 80, down 20 week-over-week.
- Panamax congestion declined below 140, dropping 30 vessels over four weeks.
- Supramax congestion saw a 250-vessel reduction, continuing its easing trend.
- Handysize congestion rose above 180, increasing 10 vessels week-over-week.
Market Outlook
- The Capesize market remains in a transitional phase, where existing stockpiles and vessel repositioning are shaping freight dynamics.
- Recovery signs are emerging, particularly in freight rates and vessel activity.
- March trends will determine whether the market stabilizes or continues experiencing downward freight rate pressure.
This evolving landscape requires shipping firms to adjust capacity and pricing strategies to navigate the shifting supply-demand balance in the global dry bulk market.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Breakwave Advisors
