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As the world waits for a US-China trade deal, it would appear that dry bulk trade is largely flatlining. The Baltic Dry Index looks like repeating last year’s performance of being the least volatile year since 1999. FFA traders have been complaining of a lack of volatility in the forward curve. They report a fear of enough oversupply to cap earnings but not enough to force earnings down to a level where owners begin to consider accelerating demolition plans for elderly tonnage.
There has been some month on month movement in earnings. After Lunar New Year affected capesize markets, driving the average TCE for February down to $7,936, it rebounded in March to $20,802 only to subside in April to $16,022 then subside again in May so far to $15,437. On the Australia to China route, earnings were actually up 50% on May 23 compared to April 23, at $17,837 compared to $11,892, but the high percentage only indicates the mediocrity of the quanta. On the Brazil to China route, earnings fell 4% over 30 days to $14,574 on May 23.
We’re on track for the least volatile year this century
A dismal April for panamax bulk carriers was followed by an uninspiring March. In the Atlantic, the round voyage from and back to Europe sat at an opex-ish $9,873 a month ago, rose to $12,466 on May 9 then petered out, falling back to $9,805 on May 25. The trip out from Europe to China is basically unchanged for an entire month at $17,117 per day. The Mississippi to Qingdao voyage lost 2% over 30 days to May 25 to snooze at $17,607. The Santos to Qingdao grains / beans voyage, despite a switch in Chinese purchases from the US to Brazil, slipped 8% to an unenviable $11,916 per day.
The Northeast Asia round voyage traded mostly between $11,000 and $12,000 in April, ending the month at $11,043, but lost ground in May, bottoming out at $9,896 on May 13 and barely recovering to $10,302 as of May 23, down 15% over 30 days earlier. The South China to Indonesia coal voyage was also 15% lower on May 23 than on April 23, at $9,414 – you can read a variety of views on the outlook for Chinese coal consumption in our recent coverage of the Geneva Dry event. The mammoth, 105-day, Singapore to east coast South America round voyage was rated at $12,895 on April 23 and has moved little since before falling in late May to $12,166 as of the 23rd. Overall the P5TC average for May to date is $11,867 following $11,951 in May and $11,411 in March. So far, so Meh.
Life has been slightly more interesting for ultramax bulk carrier operators. Rates from the USG to NE Asia rose 27% to $18,714 on May 23, via a peak of $18,800 two days earlier. Ships ballasting from the Indian Ocean to S Africa to load coal for China discharge were assessed at $13,500 per day for the voyage as of May 23, 18% higher than 30 days earlier.
West Africa was a happy hunting ground for some ultramaxes, with day rates via the east coast of South America to Europe swelling by 25% over 30 days to $13,307 per day as of May 23. The long voyage from West Africa via the east coast of South America to North China however only added a dysfunctional 3% over the 30 days to May 23 to sit at $14,136. In the Atlantic, a trip westbound from Europe to the US Gulf was rated at a dank $8,236 per day on May 23, down 11% on the month, while the reverse voyage was a sunny 31% more remunerative over the same dates, rising from $14,261 to $16,636. The last three monthly average earnings for Ultramaxes have been $9,865 then $10,093 and in May to date, $10,260. At least the direction is correct, from an owner’s perspective.
Handysize bulker owners have less to cheer this month as average earnings to date for May are $10,067 after $10,514 in April and $10,415 in March. The best performing route in Asia has been the round voyage from and to Southeast Asia which has risen 9% to $10,919, while the in the Atlantic the Brazil to Europe voyage has also increased by 9% to $15,800. The reverse route however is down 5% at $6,234. The more northerly trip from western Europe to the US Gulf lost 6% over the month to land at $8,664 on May 23.
Overall, May has been a lull in the freight market. Seasonal patterns suggest that earnings should lift off from here to their October peak. Political patterns suggest that all bets are off for the balance of 2025.
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