- China’s Coal Imports Fall but Spike in August on Policy Shifts.
- Record Soybean Imports and Strong Corn Flows Support Panamaxes.
- Market Drivers Shift from Price Volatility to Geopolitics and Trade Policy.
In September 2024, the dry bulk market hit a bit of a snag, unable to maintain its position above the 2,000-point threshold, with the Baltic Dry Index settling at 1,890. Most of the gains came from Capesizes, while Panamaxes took a hit, dropping nearly 20 per cent due to weaker grain trades. Chinese soybean imports peaked at 12.14 million tonnes in August before tapering off, and iron ore inflows fell to 101.39 million tonnes, down both month-on-month and year-on-year. Still, cumulative imports for the first eight months saw a 5.2 per cent increase, thanks to Brazil ramping up supplies and boosting Capesize demand, reports Break Wave Advisors.
Stronger Market Balance in 2025
Fast forward a year, and the dry bulk market has found its footing again. The Baltic indices are now sitting at healthier levels, with Panamaxes leading the charge in recovery. Thanks to steady grain flows and consistent employment from South America, Panamaxes have bounced back from last year’s slump. The Baltic Panamax Index recently closed at $18,056 daily, marking a 43.1 per cent increase compared to last year. Supramaxes and Handysizes also saw improvements, closing at $18,856 and $14,475 daily respectively, which translates to gains of 18.2 and 13.5 per cent from the previous year. In contrast, Capesizes are still lagging behind the levels seen in September 2024, resulting in a more balanced market across different vessel sizes.
Iron Ore and Steel Trade
Between January and August 2025, China imported 801.62 million tonnes of iron ore, reflecting a 1.6 per cent dip from the same timeframe in 2024. However, August saw imports bounce back to 105.23 million tonnes, showing an increase both month-on-month and year-on-year, indicating a return to stability after a sluggish first half. On the steel front, Chinese producers ramped up exports, shipping 77.49 million tonnes in the first eight months of 2025, which is a 10 per cent rise from last year. August shipments reached 9.51 million tonnes, slightly down from July but still impressively high. These volumes have held steady despite new anti-dumping measures in markets like Vietnam and South Korea, showcasing the competitiveness of Chinese steel and Beijing’s commitment to keeping export channels open.
Coal Flows and Energy Policy
In August, China saw its coal imports dip to 42.74 million tonnes, marking a 6.8 per cent decrease compared to the same time last year. From January to August 2025, imports fell by 12.2 per cent, totalling 299.94 million tonnes, as the country leaned more on its domestic supply. However, August still hit an eight-month high, as rising local prices sparked a brief resurgence in demand for foreign coal. Output restrictions since July have pushed domestic production down to its lowest in a year, causing prices to rise before they eased in September, highlighting just how quickly policy changes can shake up the market.
Grain Trade and Panamax Support
Soybeans are still at the heart of the grain market, with China importing a record-breaking 12.28 million tonnes in August 2025, primarily from Brazil. These imports helped secure supplies ahead of the U.S. harvest. Brazilian exports are on the rise too, with September soybean shipments expected to hit 7.43 million tonnes, a new record. Cumulative exports are projected to reach 95.53 million tonnes, reflecting a 7.3 per cent increase year-on-year. Corn shipments are also holding strong, with projections of up to 7.73 million tonnes, ensuring steady work for Panamax vessels.
Shifting Market Drivers
The transition from 2024 to 2025 has brought about new market dynamics. While price fluctuations were the main drivers of freight in 2024, today, factors like geopolitics, trade policies, and energy strategies are taking centre stage. China’s balancing act between domestic demand and exports is reshaping trade flows, while Brazil’s record grain exports underscore South America’s crucial role in global food security. Looking ahead, Panamax vessels are set to benefit the most from grain shipments, while Supramaxes and Handysizes continue to perform well, and Capesizes are still in the mix but with less prominence, leading to a more balanced market overall.
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Source: Break Wave Advisors
