MID-SHIP Report: Dry Bulk Freight Market – Feb 6, 2025

February 7, 2025

The new month and week start with more optimism in the forward curves. Today’s forward assessment points to significant improvements from the current low spot rates for Q’s 2/3/4 of 2025 across all segments, particularly the cape size. Wednesday’s forward assessment pointed to improvements for these largest bulkers of +108%, +170%, and +208% across the next three quarters, Albeit against a close to OPEX cost baseline $6,734 spot daily time charter average. Benchmark trade lanes of Tubarao to China and Tubarao to Europe are down $7.62 v. $7.20 and $17.22 v. $16.90 during the week. The Cape-size segment remains sluggish, with a lack of activity in the prompt position.

China’s return from the Lunar New Year celebrations has positively impacted the Panamax market. The Time Charter Average has surged by $2,000, or over 30%, in the past week alone. All major routes are experiencing significant gains, prompting shipowners to revise their targets upward. South America is showing considerable strength, with major grain houses securing vessels in anticipation of a robust market. The NOPAC region has seen spot rates rising sharply and limited interest in forward business at prices currently quoted due to the rapidly growing market trend.

Shipowners are now holding back on fixing long periods, waiting for more substantial bids. The Supramax market is experiencing its first signs of positive sentiment in 2025, likely due to the return of participants following the Chinese New Year. In the Atlantic, rates across most sectors have stabilized, with owners beginning to apply premiums for March dates. Activity and sentiment have gradually increased in North and South America this week as new cargoes enter the market. However, the remaining spot ships need to be cleared out before a significant rise in freight rates can occur. In the Pacific, the market remains relatively quiet. Rates out of Southeast Asia have seen a slight increase due to improved activity, but overall rates in the Far East remain flat and consistent with previous levels.

The Handy size market, weighted down by a heavy vessel count, had been trending down and trading within a narrow range up to this week; by mid-week, we have seen a change of fortunes, and the time charter average moving has started to move upwards. The key question is whether the Handies can break out from its range-bound confinement and if the Pacific rim will pick up after several weeks of vessels fixing sub $4,000 per day for trips within Asia. The Continent and Mediterranean/Black Sea markets have been trading sideways, but many owners are more optimistic that a rebound is on the horizon.

In the Domestic market, the ports in the Gulf are back to normal operations after winter storm Enzo shut down the entire region with historic snowfall and low temperatures. The ripple effect from the halt in operations will be felt across the supply chain, with delays expected across all industries and modes of transportation. The USDA reported grain barge freight for St. Louis to NOLA was trading near 370 percent of the tariff as of the week ending January 28, 2025. For the week ending January 25, barged grain movements totaled 652,550 tons. This was 52 percent more than the previous week and 91 percent more than the same period last year, according to the USDA.

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