Capesize market ends week on strong note, yet outlook remains fragile

However, analysts remain cautious about the sector’s future trajectory, citing potential headwinds.

As of 16 May, average Capesize spot charter rates reached US$16,736 per day, a nearly 20% increase compared with 9 May. “The Capesize market closed the week on a firm and optimistic note,” the Baltic Exchange reported in its weekly roundup. “Early activity was stifled by the Vesak Day holiday in Singapore, and while initial trading was subdued, sentiment remained bullish from the previous week, underpinned by stronger bids and tightening tonnage.”

Intermodal head of research Yiannis Parganas told Riviera a notable increase in bauxite exports from Guinea is supporting the mini-rally. “The region experienced rainfall-related disruptions, but exports have since ramped up, particularly for cargoes bound for China,” he said.

Riviera recently reported Chinese bauxite imports reached nearly 31M tonnes in the first two months of 2025, marking a 25% year-on-year increase. Guinea accounted for 77% of these volumes.

Mr Parganas also noted a rebound in Chinese coal demand, which has further underpinned rates.

In the coal segment, shipbroker Ifchor Galbraiths’ research team told Riviera East Australian coal activity has picked up in recent days, with more cargoes entering the market. “The Pacific should see a seasonal push ahead of Australia’s fiscal year-end,” analysts noted.

The Baltic Exchange echoed this sentiment, observing while early-week rates in the Pacific softened, support returned mid-week, buoyed by rising values and robust miner engagement.

Improved activity across basins

In the South Atlantic, Ifchor Galbraiths reported activity was initially hampered by a sudden force majeure event at San Nicolas. However, improving volumes out of Brazil and a slightly tighter tonnage supply are now helping to clear the overhang of available vessels.

The C3 route (Tubarao, Brazil to Qingdao, China) had been excessively discounted compared with other routes, but analysts said this imbalance is beginning to correct, with stronger bids emerging for early June loadings.

In the North Atlantic, momentum is also starting to build. “More activity emerged towards the end of the week, particularly for fronthaul business from Canada,” said Ifchor Galbraiths.

The Baltic Exchange added that robust demand from South Brazil and West Africa, combined with tight tonnage in the North Atlantic, helped lift market sentiment.

Market sources further noted that fresh Capesize tenders out of South Korea and Japan, along with increased presence from Brazilian mining major Vale, have also contributed to the recent upswing.

Outlook remains guarded

Despite the recent surge, analysts remain cautious. Mr Parganas warned while the market has strengthened, daily Capesize earnings are unlikely to break through the US$20,000 threshold in the near term, as tonnage availability is expected to increase.

A similarly cautious tone was struck by BRS Shipbrokers in its latest weekly report. While the financial year-end in Australia – typically associated with higher export volumes – could offer seasonal support, analysts stressed oversupply and fragile sentiment continue to weigh on the sector. “A rebound in cargoes from both Australia and Brazil may help stabilise the market,” they concluded.