Sea transportation

Analysts expect further market revival in hopes of increased demand for transportation from China

At the beginning of the current week, May 22, the general index Baltic Dry (BDI), which includes rates for Capesize, Panamax and Supramax vessels, fell to its lowest level since early March – to 1365 points, down 19 points or 1.4% from the previous session. This was due to a drop in demand for the Capesize and Panamax segments, informs Hellenic Shipping News.


Panamax Index, which tracks cargoes of coal and grain from 60 thousand tons to 70 thousand tons, as of May 22 fell by 2 points, or by 0.2% – to 1220 points (the lowest level since February 23). The average daily earnings in this segment were about $11,000.

Capesize Index, which tracks cargoes of iron ore and coal with a volume of 150 thousand tons, fell almost to a monthly low, by 40 points, or by 1.9% – to 2065 points. The average daily earnings for vessels of this class amounted to slightly more than $17,000.

At the same time, according to Baltic Exchange, the previous week was active for Capesize class vessels in the Pacific Ocean. In particular, large companies served the transportation of iron ore from Western Australia to China, and there were also several tender cargoes to Japan. However, towards the end of the week, the market potential gradually faded away, as there were problems with the full loading of ships. Shipowners, for their part, are not interested in ships sailing half empty or with ballast.

In the Atlantic, the beginning of last week was restrained. For Panamax class vessels, the market remained negative, and the decline in traffic continued. In particular, there was very little information about transatlantic flights with routes that traditionally carry minerals.


The beginning of the year and the first quarter are considered seasonally inactive for the dry cargo market, in particular Capesize vessels. However, the market recovered somewhat, in part due to stronger iron ore trade flows from Australia and Brazil. China has resumed imports of Australian coal, but weather conditions have limited supplies from Indonesia.

In April 2023, sea freight transportation, according to SMM, have been mostly stable. At the end of the month, BDI stood at 1576 points, up 164 points from the beginning, but remained low. In early May, global demand for sea freight began to gradually recover, and this trend was expected to continue, in particular, increased shipments of nickel ore.

Analysts and participants in the maritime freight market continue to rely on China’s prospects, changes in the country’s real estate market, and demand for iron ore and coal in China, which may contribute to higher freight rates, in forecasts for the dry cargo market for the second quarter of 2023 and the current year as a whole. Geopolitical tensions and the vulnerability of the global economy are also considered factors that could negatively affect traffic volumes.

To support freight rates for bulk carriers, in particular for ships of the class for Capesize, can also sea imports of coal to India. According to Intermodal analytics Fotis Kanatas, from 2021 to 2022, the import of coal by sea to this country increased by 19%. South Africa and the Russian Federation accounted for the largest share of coal supplied to India this year.

Coal imports are supported, in particular, by local steel enterprises that increase steel production. According to forecasts, domestic demand for steel products this year will grow by about 6% y/y. Therefore, the growth of coal imports to India is expected to continue. Accordingly, the demand for ton-miles will grow.

As GMK Center reported earlier, in early March dry bulk market in the short term looked optimistic due to an expected increase in demand for iron ore in China amid a resumption of construction activity and thanks to seasonal Brazilian exports.