Capesize sailing speeds fall to record lows and grain shipments to China halve as the dry bulk market continues to weaken
With much of Asia celebrating the Lunar New Year holidays the benchmark Baltic Dry Index (BDI) dropped another 2.68% to 726 points on Wednesday.Signal Ocean’s Dry Weekly Market Monitor report commented: “The momentum in the freight market has weakened as we approached the end of January and the onset of the Chinese New Year. The prevailing oversupply situation continues to significantly pressure market sentiment, compounded by a decline in demand for tonne-day growth.”For Capesizes a clear downward trend of tonne – day growth for shipments from Brazil – China was noted and that the Baltic Capesize Index (BCI) had dropped nearly 50% compared to levels at this time last year. The current tonne – day growth rate for Capesizes was noted at a record low compared to a peak at the beginning of 2024.
With few cargoes to fill up vessels owners have turned to ultra-slow steaming to try and regulate supply.“As the freight market continues to soften, Capesize laden speeds have fallen to a historic low over the past 12 months, reflecting further stress within the segment,” the report said.In the Panamax sector Bimco highlighted the sharp decline in Chinese grain demand.“In January, grain shipments to China are estimated to fall 51% year-on-year, partly due to a decline in import demand for soya beans caused by low crusher margins. Although Chinese soya bean production decreased 1% year-on-year in 2024, inventories are high after a surge in imports in the first half of the year. Import demand for maize and wheat has also declined due to record high harvests in China in 2024,” saud Filipe Gouveia, Shipping Analysis Manager at Bimco.
Related:Baltic Dry Index drops below 800 points
Brazil, which accounts for 47% of grain exports to China, has seen a 29% drop in shipments year-on-year so far in 2025, while the US, which accounts for 22% of exports to China, has seen a 57% decline in cargoes.The drop in grain shipments is one the factors that have impacted the dry bulk shipping market as a whole. “Panamax ships have been especially affected as they carry 83% of grain cargoes to the country. On average, the Baltic Panamax Index was down 41% year-on-year in January,” Gouveia said.Maritime Strategies International (MSI) in their Horizon monthly dry bulk report noted that its model showed that demand growth in 2024 was supported by inefficiencies in the market particularly the drought restrictions in the Panama Canal earlier in the year and rerouting from the Suez Canal to the Cape of Good Hope. However, Cape diversions are expected to decline with the Houthi no longer targeting international vessels, apart Israeli owned or flagged, in the Southern Red Sea.Related:Dry bulk shipping market outlook for 2025MSI said it was unlikely that there would be increased inefficiencies to bolster the dry bulk trade this year – in fact the opposite was more likely – and shipping demand would be linked more closely to weak underlying commodity trade.
