Capesize vessels struggle, earning the least among bulk carriers

According to the Baltic Exchange, average daily spot rates for Capesize vessels reached US$5,939 on 14 February. Baltic highlighted in its weekly report that this marks the lowest level since February 2023, and the weakest time charter average among the four dry bulk sectors. For comparison, Panamax and Supramax daily earnings averaged US$8,819 and US$7,634, respectively.

“In recent memory, there have been only a handful of instances where the Capesize C5TC underperformed sub-Cape segments during February,” BRS Shipbrokers head of dry bulk research Wilson Wirawan told Riviera.

Mr Wirawan pointed to 2020 and 2023 as recent examples, when the C5TC averaged a mere US$2,721/day and US$3,749/day, respectively. By contrast, this February’s average of around mid-US$6,000/day aligns more closely with the February 2019 figure of US$7,111/day.

Factors shaping the market

Explaining this trend, Mr Wirawan noted the market typically recovers after the Chinese New Year (CNY) holidays, bolstering Panamax and Supramax vessels that transport thermal coal from Indonesia to China.

In the Supramax/Ultramax sector, the Baltic Exchange reported on 14 February renewed interest driving demand and supporting rate increases in most regions. “The Atlantic saw stronger demand from the East Mediterranean,” analysts added.

Furthermore, Mr Wirawan pointed out steel exports from China – primarily transported by geared bulk carriers – maintained strong momentum during the first six weeks of 2025, despite ongoing trade tensions.

Conversely, Capesize bulk carriers operating in the Pacific have struggled due to a shortage of east Australian coal cargoes. This issue has been exacerbated by an untimely cyclone near Port Hedland, prompting miners to adopt a conservative approach.

Post-CNY recovery?

Some analysts anticipate a market rebound following the Chinese New Year celebrations, but the extent of recovery remains uncertain.

BRS Shipbrokers noted in its latest weekly report that, based on historical Baltic Exchange data across the past seven years, shorthaul shipping routes typically experience an uptick in freight rates post-CNY. This suggests Chinese market players gradually return with more bids and tenders.

However, longhaul Capesize routes – such as the Australia-China iron ore voyage – along with the inherently high volatility of Capesize freight, do not exhibit a significant post-CNY increase.

In the short term, BRS Shipbrokers expects a gradual market recovery. While a significant rebound in downstream demand is unlikely, the resumption of domestic essential procurement should help improve the currently depressed freight levels.