October 8, 2025
With China returning from a week-long national holiday, the market’s near-term direction is taking shape.
Capesize was active last week, but a significant decline in rates was observed. Fortunately, this week is more optimistic, and good volumes of Brazilian, West African Iron ore, and Bauxite continue to support improvements. China and its economic developments continue under pressure, yet showed reasonably firm import numbers in August and September for most of the major bulk commodities.
Looking ahead, much anticipated Simandou iron ore project in Guinea remains a key wildcard, having recently stopped production after experiencing a fatal accident, with no announcement of a restart date as yet. First exports are expected in late 2025 ramping up to 6-8% of global supply by 2028, the expected result being a boost to future tonne-miles for Capesizes due to long-haul routes to China.
The Panamax market may have found a short-term floor.
Reaching parity of both Atlantic and Pacific rounds. Since mid-September, the Time Charter Average has declined by nearly 20% and is now testing the support level of USD 15,000 per day. In the Pacific, thanks to a strong North Pacific export market, increased iron ore shipments from Australia, and steady coal flows from Indonesia, rates have moved up. In the Atlantic, tariff uncertainty, trade war with China, and pending USTR fees have seen Atlantic rates decline about 30% or USD 7,000 since mid-September.
The Supramax segment has seen a fair amount of activity this week, showing little overall change from previous levels. Despite steady cargo volumes in several regions, market confidence has eased as the Baltic Supramax Index (BSI) slipped for the seventh straight session, settling near 1,411 points. Meanwhile, the Baltic Dry Index advanced by around 2% to a one-week high, reflecting stronger conditions in the larger vessel classes. The divergence between these indices highlights the current imbalance within the dry bulk sector, as Supramax earnings remain capped, while Capesize and Panamax ships capture the majority of the upside. The Atlantic opened the week with a steady undertone, supported by consistent grain and mineral loadings from Brazil and Argentina. Trading in Asia quieted considerably as China’s Golden Week curtailed demand and limited new fixtures. In the Mediterranean and Black Sea, conditions are relatively stable. As October progresses, the market’s trajectory will likely depend on post-holiday demand in Asia and the sustainability of Brazil’s export momentum.
The Handy market over the last two weeks has been steady despite Holidays in the Pacific and well-attended Miami ASBA + Houston breakbulk conferences in the U.S. The Baltic daily index of the 7TC routes for 38,000 DWT Handy is up USD 1,212 per day since our last report, with today’s average at USD 15,631.
Period interest remains low, with most shipowners opting to trade on the spot market rather than locking in long-term deals at current low levels.
Container rates have hit their lowest levels since January 2024, according to the Drewry World Container Index.
As we step into October, the shipping market in the Mediterranean and Black Sea regions enters a transitional phase. After an unusually dynamic start to September — driven largely by short-term cargo movements and sporadic spot activity — the remainder of the month showed signs of stabilization. Although the market lacks the strong cargo flow typically expected during this period, the relative scarcity of spot-seeking vessels has prevented freight levels from softening significantly. This balance between limited demand and tight tonnage availability is a clear indication that much of the market is being sustained through off-market fixtures and repeated contractual voyages. These “invisible” trades, often executed between long-standing charterer–owner relationships, are helping maintain a sense of continuity in an otherwise muted environment. Despite the absence of high spot cargo volumes, this underlying business provides a level of resilience to the freight market.
In the South Pacific, the Handy and Supramax/Ultramax segments have shown strong performance since July, steadily climbing rates. At their recent peaks, Handy-size vessels were closing in on USD 14,000/day, while Ultramax vessels were reaching USD 17,000/day basis delivery in Southeast Asia and the Far East. However, this upward momentum has begun to moderate. The market is now undergoing a correction, with time charter rates easing and trading ranges narrowing. While spot rates remain firm, it is essential not to overlook the sentiment in forward markets — futures for both Handies and Supras are pricing in significantly softer conditions, with Baltic FFA values for December and Q1 2026 trading around 30% below current spot levels. This underscores growing caution among market participants heading into year-end.
In the inland market in the USA, low water is restricting barge traffic along the inland river system for the 3rd grain season in a row. At the confluence of the Ohio and Mississippi rivers in Cairo, IL, river levels have dropped 9 feet below the 10-year average, with New Orleans reporting its lowest levels in 10 years as well. The restrictions that will follow will severely limit not only the volume to be loaded in barges, but the amount of barges any single towboat may take on a voyage. The restrictions and low water event are expected to hold a firm grip through October and well into November.
Importers are rushing to create bonded warehousing space in the U.S. as the current Administration’s tariffs continue to crack down on shipments from China and the rest of the world. Many of the 1,700 bonded warehouses in the U.S. are at capacity, prompting a mass application by companies to expand bonded space with the U.S. Customs and Border Patrol. In early 2024, bonded storage space was often priced at approximately twice the cost of standard storage, but since the start of 2025, some bonded storage has risen to four times the price, according to industry data.
The rise in one US truck pricing index last month shows that shippers are balancing current capacity needs and future demand rather than taking advantage of a soft freight market to demand lower prices in the short term. The truckload producer price index (PPI) rose 1.8% in August from July, while the less-than-truckload PPI expanded 1.5% within the same period, according to the US Bureau of Labor Statistics (BLS).
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