The dry bulk market remains relatively stable compared to other segments

Despite the escalation of the conflict in the Middle East, which has seriously impacted global shipping, the dry bulk market has remained relatively stable compared to other segments.  According to industry experts, the decline in demand from charterers is largely offset by a shortage of vessel supply — not only due to the blockade of the Strait of Hormuz but also because a significant amount of tonnage has been withdrawn from the market for periodic inspections, which affected the situation in the first quarter.

As was the case at the beginning of last year, this sector of the maritime transport market is currently supported by the Capesize segment, high demand for iron ore imports to China, and active shipments of this raw material from Brazil and Australia.

According to Kallanish, iron ore freight rates on the benchmark Tubarao (Brazil) – Qingdao (China) route stood at $30.55/t as of March 27, slightly below the figure from a week earlier ($30.75/t), while on the Western Australia–China route, they fell to $10.6/t (-11% from last week). However, for the first route, these figures are the highest since the spring and summer of 2024.

In the previous week (March 16–20), dry bulk freight rates showed mixed trends on key routes. Low demand for tonnage and a limited number of contracts signed in both the Pacific and Atlantic basins held back market dynamics.  At the same time, market activity in the North Atlantic picked up from mid-week due to the arrival of new transatlantic and direct cargoes.

In contrast, a week earlier (March 9–13), freight rates rose amid rising bunker fuel prices due to the conflict with Iran, despite relatively low trading activity

In the short term, iron ore freight rates will be driven by market sentiment, the number of contracts signed, and low demand for vessels, although fluctuations in bunker fuel prices and changes in geopolitical factors could provide support.

The average Baltic Dry Index, notes Splash247, stood at 1,777 points, and in February at 2,041 points—both figures are the highest for their respective periods since 2010. March forecasts were also positive amid high demand in the Atlantic due to rising industrial activity in the U.S. and Europe, as well as stable expectations regarding export demand from South America. In addition, Asian iron ore prices remained relatively stable, serving as a positive signal for demand from Chinese buyers. However, the industry publication notes that the average BDI in March (as of March 25) stood at 2,064, lagging behind the averages for the same month in 2022 and 2024. Some of the momentum from the start of the year, which began well for shipowners, was lost due to a decline in charterer inquiries caused by rising freight rates amid higher fuel costs resulting from the conflict in the Middle East.

As noted by Drewry consultants, the dry bulk market remains fundamentally stable, but freight rates are being affected by rising bunker fuel prices at major hubs. Fuel costs are increasingly dominating voyage economics, which could continue to put downward pressure on freight rates even amid stable trade flows.  If the situation does not change, the market will shift from being influenced by geopolitical factors and vessel availability to pressure driven by fuel costs.

As of March 26, the Baltic Dry Index rose for the second consecutive day thanks to a strengthening in the Capesize segment, reaching 2,014 points (+0.7% from the previous trading day). The Capesize Index (which tracks iron ore and coal cargoes of 150,000 tons) stood at 2,974 points (+2%) on that date, with the average daily earnings for vessels in this class increasing by $534 to $23,471.