The Capesize market has been closely monitoring China’s iron ore port stocks this week. Exactly one year ago, inventories had dipped to 105.2 million tonnes as of October 13, marking a nearly 20 percent year-on-year drop and hitting their lowest level since October 2016, according to data.

Fast forward twelve months, and the landscape has drastically changed. As of 10th October, imported iron ore stocks across 45 major Chinese ports totalled 151.1 million tonnes. This ended a three-week decline, though the increase was marginal rising by just 530,100 tonnes, or 0.4 percent, from the levels recorded on September

26. Despite this slight uptick, high stock levels and the absence of any substantial stimulus measures from Beijing weighed heavily on the Capesize market during the forty-second trading week. The lack of decisive government action to bolster economic growth added further pressure to freight rates, causing Capesize rates to take a significant hit.

The Panamax market faced concurrent challenges, as sluggish corn export activity from Brazil, coupled with a lack-luster North Atlantic region, weighed on market sentiment. These factors contributed to downward pressure on the spot market, reflecting broader weaknesses in demand and trade flows for Panamax units.

On the macroeconomic front, China’s economy expanded 4.6 percent year-on-year in the third quarter,

official data showed on Friday, slower than in the previous three months, underlining faltering growth as Beijing steps up stimulus efforts.

The economic growth figure is the lowest in 18 months, below the Government’s full-year target of 5 percent and less than the 4.7 percent recorded in the three months to June as sluggish consumption and a property slump weighed on household sentiment. The softer growth will underscore the need for more support from Beijing, which in late September announced its biggest monetary stimulus since the pandemic and followed up with promises of heavy fiscal spending. Regarding external trade, China’s overall import figures painted a rather complex picture for the dry bulk sector.

Driven by steady demand throughout the year, Iron ore imports for the first nine months of 2024 totalled

918.87 million tonnes, reflecting a year-on-year increase

of 4.9 percent. The recent price decline, falling below the psychological $100-per-tonne mark in August and September, encouraged more bookings from seaborne cargoes, as mills sought to capitalize on the lower cost despite high portside inventories. However, the outlook remains uncertain, as domestic iron ore output slipped by

9.4 percent year-on-year in August, according to the Metallurgical Mines’ Association of China.

This reduction in domestic production could partially offset the high port inventories, but it has yet to lead to a significant rebound in seaborne cargo demand. Analysts

expect October’s import volumes to remain elevated as mills continue to stockpile iron ore, but the overall demand could wane if China’s steel margins remain tight.

In contrast, China’s coal imports surged in September, hitting a record 47.59 million tonnes, up 13 percent year- on-year. This spike in coal imports was primarily driven by falling international coal prices and heightened demand from both industrial and thermal power generation sectors. As global benchmark coal prices dropped in late September, Chinese buyers took advantage of the more favourable pricing environment, particularly as domestic coal production was insufficient to meet rising power demands. From January to September, China’s coal imports rose by 11.9 percent year-on-year to a substantial

3.89 billion tonnes. This surge in coal demand, driven by both seasonal factors and increased industrial usage, provided a tailwind for the dry bulk sector.

During the same period, China’s soybean imports also registered a near-record high of 11.37 million tonnes, marking a staggering 59 percent increase compared to the same month in 2023. The spike was largely attributed to lower global soybean prices and an aggressive buying strategy by Chinese importers seeking to mitigate potential supply chain disruptions in the coming months. Brazil remained the dominant supplier in this trade, benefiting from favourable harvest conditions and competitive pricing. Total soybean imports for the first nine months of the year reached 81.85 million tonnes, reflecting an 8.1 percent year-on-year increase. This

robust demand for soybeans has buoyed the sub- Capesize segments.

However, the third quarter ended on a weaker note for grain trades, with Brazil’s soybean and corn exports declining by 4.7 percent and 26.6 per cent year-on-year respectively in September. The muted export activity from Brazil has carried into October, further softening Panamax Atlantic balancing levels and adding pressure to freight rates in this segment.

Despite positive growth in coal and soybean imports during the previous months, dry bulk market is grappling with significant headwinds. High portside inventories, weak steel margins, and subdued construction demand in China have stifled the market’s potential upside, particularly for the Capesize and Panamax segments. Although coal and agricultural imports have provided some relief, the absence of decisive stimulus measures from Beijing and ongoing uncertainty surrounding China’s industrial output have cast a shadow over the market’s prospects. In this challenging environment, the Baltic Dry Index closed today at 1,576 points, a decline of 454 points month-to-date, reflecting the mounting pressure across key dry bulk segments.

Capesize

With many miners absent early in the week, the momentum Dalian iron ore futures experienced a sharp decline on Thursday, marking their lowest level in over

two weeks. This drop was attributed to the absence of new economic stimulus measures from a key policy briefing in China, coupled with an increase in supply from major mining companies. The Capesize TC Average mirrored this downward trend, losing 19.7 percent of its value and concluding the week at $18,875 per day.

Pacific

In the Pacific, China’s iron ore imports surged in September, hitting a 13-month high due to increased shipments from Australia and higher steel production. Imports rose by 2.7 percent month-on-month and by 2.9 percent year-on-year, totalling 104.13 million tonnes. For the January-September period, imports climbed by 4.9 percent compared to the same period last year, reaching

875.9 million tonnes. However, during the week ending 12 October, iron ore exports from Australia’s major producers—Rio Tinto, BHP, Fortescue, and Roy Hill— dropped to their lowest levels since February, with overall shipments falling to 35.53 million dwt from

38.87 million dwt in the same period last year. Exports to China also decreased to 30.37 million dwt from

31.76 million dwt, with all shipments fixed before the recent Chinese economic stimulus package. Additionally, iron ore stockpiles at 45 major Chinese ports rose by 1.3 percent from the previous week, reaching 153 million tonnes as of 17 October, according to latest survey. In the spot market, the Baltic C5 index saw a significant 10.5 percent decline week-on-week, settling at $8.965 per metric tonne. Meanwhile, the time

charter rate for the C10_14 route dropped by 20 percent, closing the week at $17,723 per day. Notable fixtures included Rio Tinto covering two stems of 170,000/10 from Dampier for a trip to Qingdao at rates between $8.80 and

$8.90 per metric tonne, and TBN fixing 170,000/10 from Saldanha Bay to Qingdao at $17.17 per metric tonne.

Atlantic

In the Atlantic, Brazilian mining giant Vale reported a 13 percent quarterly increase in iron ore production, with output rising by 5.5 percent year-on-year for the July- September period, reaching 90.97 million tonnes—the highest quarterly production since the fourth quarter of 2018. This growth was largely driven by strong performance at its S11D complex and higher output from its Southeastern System, which includes the Itabira and Brucutu mines.

Between 7-13 October, global iron ore shipments from Australia and Brazil rebounded by 3.7 percent after three weeks of declines, largely due to a 33.5 percent surge in Brazilian shipments. Vale’s shipments alone increased by 27.4 percent compared to the previous week, adding 1.4 million tonnes. Despite this recovery, the Baltic C3 Tubarao-Qingdao index dropped by 13.8 percent, closing the week at

$22.10 per metric tonne. Polaris secured TBN for their 170,000/10 stem from Tubarao to Qingdao at $22 per metric tonne, while NYK fixed TBN for 170,000/10 from Seven Islands to Qingdao at $29.25 per metric tonne with

Glencore. The transatlantic market remained under pressure, with the C8_14 route dropping 15 percent week-on-week to $19,000 per day. Front-haul rates also softened, with the route closing at $41,094 per day, reflecting a 14.8 percent decline.

Although there was some interest in period charters for both short-and long-term contracts, this did not result in a substantial number of concluded deals. The overall market sentiment remains cautious, with supply-side dynamics and weak economic signals from China continuing to play a significant role in shaping market’s direction.

Iron ore stockpiles at 45 major Chinese ports rose by

1.3 percent from the previous week, reaching 153 million tonnes as of 17 October, according to latest survey.

Panamax

O Corn, Where Art Thou?

This week saw almost no activity from ECSA and fewer cargoes from USG. Brazil’s September exports were down 26.6% from last year, while U.S. farmers sit on a record corn crop with no immediate demand from China. The Far East saw some movement with Indonesian coal, but otherwise, tonnage continued to accumulate. In this

climate the P82 average index tumbled by 10.5% W-o-W, settling at $11,562 daily.

Pacific

In the Pacific commodity news, China’s total coal and lignite imports reached a record high of 475.88 million tonnes (MMT) in September, marking a 7.3% month-on- month (m-o-m) increase and a 12.9% year-on-year (y-o- y) rise, according to data from the General Administration of Customs China (GACC). This surge in imports was driven by stronger demand for thermal coal, as the rise in domestic thermal coal prices opened opportunities for import arbitrage.

Although vessel-tracking data indicated a decline in seaborne imports from August, the higher import figure can be explained by customs clearance delays for some cargoes discharged in August but registered in September. Mongolian coking coal imports are also likely to have contributed to the overall increase. Import volumes were approximately 4% higher than the 45.8 MMT shipped in August, with these deliveries typically purchased 1-2 months in advance.

Chinese coal prices, which hit a low in May, began to recover by the end of September, with the average price of NAR 5,500 kcal/kg coal rising by circa 5.8% from August lows. Meanwhile, China’s domestic coal production reached 3.89 billion tonnes between January and September, an 11.9% increase y-o-y.

On the fixtures front, the Pacific market experienced a steep decline, with growing pressure on owners. Although some activity was noted, it was insufficient to halt the downward trend. Combined with a lengthy tonnage list and weakening sentiment, this led to bids being withdrawn or revised downward across the region. The P3A_82 HK-SKorea Pacific/RV and the P5_82 S. China Indo RV recorded a drop of 14.2% and 10.7% respectively.

On NoPac, ‘Efraim A’ (82,174 dwt, 2010) was reported at

$12,500 basis delivery Taizhou for a trip back to Singapore – Japan with Messrs LDC. On Australian rounds, ‘ Diamond Trader ‘ (82,231dwt, 2023) fixed at

$14,000 from Tianjin for a trip via Australia back to Singapore – Japan with Messrs Richland. From Indonesian fixtures, ‘ Meteor ‘ (82,589 dwt, 2010) agreed a coal run to Singapore – Japan at $11,750 pd with delivery Mailiao with Messrs KLC.

Atlantic

In the Atlantic commodity news, In September 2024, Brazil’s corn exports totalled 6.42 MMT, a 5.92% increase over the previous month. However, this figure represents a significant 26.58% decrease compared to September 2023, which had the highest export volumes in five years. For the first three quarters of 2024, Brazil’s total corn exports reached 24.39 MMT. Meanwhile, sugar exports continued their upward trend, totalling 3.95 MMT in September, reflecting a substantial 23.91% increase

compared to the same period in 2023 and a slight 0.84% rise from August. If this growth continues, 2024 is likely to become Brazil’s strongest year for sugar exports in the past five years. Conversely, soybean exports declined to 6.1 MMT in September, down 23.75% from August and 4.66% lower than the same period in 2023, as the market moves away from its seasonal peak. Looking ahead, the Brazilian Grain Exporters Association (Anec) raised its October estimates for corn and soybean exports to 6.2 MMT and

4.3 MMT, respectively.

In contrast, the United States, the world’s second- largest soybean supplier after Brazil, is sitting on its highest stocks of corn and soybeans in four years.

U.S. farmers harvested a record corn crop in 2023, much of which was kept in storage as grain prices fell to their lowest levels since 2020.

On the fixtures front, the area was overshadowed by the bleak East Coast South America market. The staple P6 route, settled at $12,441 pd a drop of 12.6% W-o- W. On one such run ‘ RG Rhea ‘ (81,577 dwt, 2020) was fixed at

$16,000 + $600,000 with delivery APS East Coast South America to Singapore- Japan for account of Norden. From the North, the P1 transatlantic route recorded a drop of 3.3% concluding the week at $9,390 pd. The P2 fronthaul route also dropped by 9.2% W-o-W, closing at

$19.491 pd. Indicatively, ‘ Treasure Star’ (82,206dwt, 2010) was agreed at $18,000 basis Flushing for a trip

via U.S. East Coast and direction India with Messrs Crystal Seas.

The FFA market had a rather non-chalant reaction to China’s Politburo weekend announcements of stimulus packages aimed at alleviating the struggling property market, which normally should have lifted expectations for increased iron ore hauls. Despite the unfavourable physical and FFA circumstances there is always room for a period deal if the money’s right. Such was the period fixture of Raffles with Selina (75,598 dwt, 2010) with S. China 15 Oct delivery and WW redelivery until Min/Max 1st Mar /20 Apr 2025.

Despite the unfavourable physical and FFA circumstances there is always room for a period deal if the money’s right.

Supramax

The Supramax segment faced a challenging week, with the BSI 10 TCA closing at $15,802, down 1.5% from the previous week. While the Atlantic submarkets showed some stability, the Pacific basin continued to experience downward pressure. Overall, fresh inquiries remained limited, and ample tonnage in the market weighed on rates, particularly in the Pacific.

Pacific

In the Pacific, the BSI Asia 3TC declined by 6.8%, closing at $14,736 as market conditions softened further. On commodity related news, China’s coal imports hit a record high in September, up 7.3% m-o-m and 12.9% y- o-y, driven by stronger demand for thermal coal. On the other hand, Vietnam’s thermal coal imports dropped sharply by 32.3% m-o-m, reflecting weaker seasonal demand, though metallurgical coal imports to Vietnam rose 26.4% m-o-m on the back of restocking by the steel industry.

On reported fixtures from the Far East, the ‘Medi Vaiano’ (60,386 DWT, 2016) fixed a trip from Dalian to Chittagong with slag at $16,800, while the ‘Tian Mu Shan’ (63,437DWT, 2017) secured a trip from Caofeidian to Brazil at $14,500. From Southeast Asia, the ‘Al Wathba’ (63,555 DWT, 2019) fixed a trip via Australia to the Arabian Gulf with delivery Indonesia at $18,000, and the ‘Al Yasat-ll’ (57,408 DWT, 2011), open Morowali, was reportedly on subjects for a trip via Indonesia to the Philippines at $15,000.

From the Indian Ocean, the ‘Amorgos’ (63,800 DWT, 2023) fixed a coastal trip with iron ore from Vizag to North of Mumbai at $16,500, and the ‘Yangze 7’ (63,523 DWT, 2014) secured a trip from Karachi to China with salt at $14,000 APS Kandla. From South Africa, the ‘Patmos’ (63,631 DWT, 2024) fixed a trip from Port

Elizabeth to East  Coast  India at $20,000   plus a

$200,000 ballast bonus.

Atlantic

In the Atlantic, market conditions were comparatively more stable, with most submarkets holding close to ‘last done’ levels. Russian wheat export quotes hit a four- month high in mid-October, driven by fast shipment paces and concerns over lower 2024 production.

However, French grain shipments plummeted due to poor production, limiting demand for vessels from French ports.

In the US Gulf, petcoke exports declined 33.8% w-o- w, mainly due to a drop in shipments to India, though Turkey partially offset the shortfall. The ‘Nefeli’ (63,466 DWT, 2016) fixed a coal trip from Norfolk to the Central Mediterranean at $26,000, while the ‘Eva London’ (63,500 DWT, 2014) secured a grains trip from New Orleans to China at $23,750 APS Houston.

In the South Atlantic, the ‘Chang Hang Hui Hai’ (57,065 DWT, 2010) fixed from Lagos to China at $15,500, and the ‘Tamarack’ (50,344 DWT, 2003) secured a trip from North Brazil to Morocco at $15,000 APS. From the Continent-Baltic region, the ‘Star Greenwich’ (63,301 DWT, 2013) fixed a trip via Ust-Luga to Dakar with sulphur at $16,000, while the ‘Bubba Boosh’ (55,464 DWT, 2014) secured a trip from Constantza to Houston via Hereke at

$11,500 APS plus a $150,000 ballast bonus. Additionally,

the   ‘Spar   Lynx’   (53,162   DWT,  2005)   fixed   from Damietta  via  Morocco to India with fertilizers  at

$17,000 APS.

The period market was quiet this week, with a lack reported fixtures that reflected a cautious sentiment among market participants.

Despite some inquiries, the lack of fixing activity highlights the uncertainty surrounding the near-term outlook of the segment.

While the Atlantic submarkets showed some stability, the Pacific basin continued to experience downward pressure.

Handysize

History questions for the Handysize.

Along the years ‘history’ repeated itself, or not, but only rhymed, dooming people to repeat it, tragically or farcical, according to the ‘lesson’ the historians, the politicians and the academics wanted to give.

So we just thought, why not us also?

So where was the Handy market today in 2023 and where is it today? How does that compare? This day last year the 7TC Average was roaming around

$12,500, not far from today’s $13,000 levels.

But looking the YTD figures, 2023 average was around $9,800, while this year we stand at $12,800. We just put together all the data in a graph and it is clear that while up until mid-May we were following parallel paths with 2024 flying about $2,500 higher, at that point 2023 dipped low until early August and disappeared at

$7,007 and at the same time 2024 managed to stay afloat and hover around the $13,000 level. Funnily enough the two ‘merged together’ mostly from the bottlenecks developing from closing the Suez route on the big export program for Chinese steels into the Atlantic.

Ahead of us we have 10 weeks to the end of the year and the popcorn is out to see if this ‘parallel life’ will continue.

In any case today the 7 TC Average closed at $13,078 or 1,2Y% higher W-o-W.

Pacific

In the Pacific a lackluster, for the most part of the week, market has come to an end. This was expressively depicted in the 3 routes’ average which moved again slightly positively adding 0.3% W-o-W. In South East Asia, while tonnage is gradually rising, the market was rather active with a healthy Australian cargo book for the end October and early November and a few local cargoes requiring loggers. This managed to keep the rates steady, if not a tad better than last done. Sentiment for next week is still positive, but concerns are starting to rise over the pressure growing from Far East positions where the market is substantially lower. This might put a lid on the rates in the South. As mentioned the market in the North is softening with limited cargo enquiry and a growing tonnage list. Owners are looking for solutions further away, like NoPac or East Australia. The best paying cargo in the area is backhaul trips which still paying numbers over $15,000 for large, good-quality tonnage. Next to that is cargo ending up in PG/India. Sentiment for next week is declining.

In the Indian Ocean and Persian Gulf market was relatively flat for the handies, especially if one compares it with the larger sizes. We are still in need of a lot more cargo here for things to improve.

Atlantic

In the Atlantic the market seemingly turned around and changed direction. While the 4 routes’ average gained 1.5% W-o-W, this is still a result of 1 route carrying on its’ back the other 3. After a month of flatness and stagnation ECSA this week showed a positive and upward trend, mostly due to a very slim tonnage list. All sizes seem to doing well in the area and smiles are slowly returning on Owners’ faces. Sentiment for next week is again slightly more positive. A bit further to the south, the USG market turned around and gained some of the previous loses, on a small rush from Charterers to cover October cancelling on their cargoes, but the week closed with some losses again. Nevertheless, sentiment has changed and positivity has returned. For how long is the big question. In the Continent, nothing changed this week, with ships in more than ample supply and cargo on the other hand remaining very slow. Mid-week one could count the available handy orders with his hands. Russian fertilizers from the Baltic are still in good supply, trying to get as much cargo out before the winter marks kick in. But again rates are not hot there too. Sentiment for next week remains rather negative. Further to the south in the Med activity was steady, if not better than last week, but this seems it did not translate into higher rates being fixed. Grain movements out of Bl. Sea were in good supply, but most of them managed to be fixed at, or just below the last done. Russian cargoes are being fixed under the radar, which deprives the market from transparency

and ammunition to aim for better rates. Sentiment for next week is rather flat.

Period activity was again on the rise. We heard of ‘Paiwan Wisdom’ (31,967dwt, 2010blt) fixing a 4 to 6 months period from Bangladesh at $12,850.

History doesn’t repeat itself, but it often rhymes – Mark Twain.

Sale & Purchase

This week brought with it further hints of price corrections, namely for older ships. In quite a few cases, the levels that buyers are offering are falling short of sellers’ expectations, portraying a slight shift in market dynamics; while it’s not yet a ‘buyer’s market”, in some pockets of the market power may be shifting away from the sellers’ side of the table. There is competition on many ships, but the sellers of rare or well-earning ships are seeing the best offers/offers closest to their expectations. Quite a few sellers, sensing the possibility of a softer second- hand market for some segments, are pulling their ships. Competition on ships may be the force keeping prices buoyant. Large modern handies as well as 28Ks are

enjoying a period of popularity on the selling block, as quite a few are being circulated.

There is still appetite for younger Kamsarmaxes, although the sales candidates are few and far between, especially higher-pedigree vessels (e.g. Japanese-blt, eco or ME engines). The Far East continues to pump enquiries for mid-age Supra’s into the market. A plethora of older handysize and Panamaxes ships are making the rounds. The ‘stick-n-move’ Capesize segment is still enjoying sound freight performance and is therefore driving demand for both older and younger ships alike. There are rumours of an excess 32K DWT Handysize BC blt 2010 being sold at around$10 mio, which would depict softer prices for such ships. A 2005 (Japan) blt Panamax BC is rumoured sold this week in the high $10s mio, showing weaker values for older ships in that segment.

In quite a few cases, the levels that Buyers are offering are falling short of Sellers’ expectations, portraying a slight shift in market dynamics.

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