US president Donald Trump has announced that April 2 will be Liberation Day when he imposes trade tariffs on countries which have tariffs or barriers on US goods. He has said some nations or blocs might be excused but with only 10 days to go, no details are as yet available. Dry bulk commodity traders, with one eye on what buyers of containerised freight did in 2024, have sprung into action and have been securing supplies of iron ore, bauxite, agriproducts, steel and timber before the next phase of the Trump trade wars kicks off.
Meanwhile, the Chinese leadership announced a 5% GDP growth target for 2025 and trailed measures to get the Chinese population consuming more. It is surely only a matter of time before we see helicopter cash falling onto Chinese high streets.
This has been good news for dry bulk freight markets. The Baltic Dry Index improved by an eye-catching 67% in March, reaching 1,643 points. The last time it exceeded 1,600 points was in November 2024, on the way down. The Baltic Capesize Index spiked to a peak of 2,893 on March 13 and as of March 21 was at 2,676, a full 170% higher than on February 21. Amid rising excitement around capesizes shipping bauxite from West Africa to China, it was the old faithful Australia-China voyage which enjoyed the biggest uptick in activity and freight prices, with daily TCEs from Port Hedland to Qingdao trampolining from $2,159 per day on February 12 to $33,291 on March 13, only to fall back to $21,737 on March 21. Brazilian exports ramped up too, with daily TCEs rising from $7,400 per day on February 12 to $25,918 on March 13, and still holding up at $25,482 on March 21.
We will see helicopter cash falling onto Chinese high streets
Good news was around in the panamax freight markets. The daily TCE from Santos to Qingdao, a common agriproducts voyage, followed a firm February with a further 13% rise in March to reach $13,529, a level last seen in October 2024. The parallel voyage from Mississippi to Qingdao added 11% to reach $17,612. US farmers were used to selling up to $2bn of grain to USAID every year but the government has cancelled the business, forcing farmers to scramble to sell product to any buyer they can find. Chinese buyers have been happy to take US wheat at four year low prices, with analysts saying the bottom has fallen out of the market for US grains futures since February. Panamaxes were being attracted to the US from Northeast Asia, with the round voyage daily TCE improving by 14% to $13,913 over 30 days to March 21.
Panamaxes sailing from Northeast Asia to Northwest Europe enjoyed a 31% uplift in earnings in the 30 days to March 21, with rates restored to a more usual $7,784 per day after a very weak first two months of the year.
The Atlantic panamax markets also enjoyed the increase in activity in March, with the daily TCE for a kamsarmax sailing from Skaw-Passero to the US east coast and back laden, adding 37% over the month to March 21 to sit at $10,105 per day. Overall the P5 timecharter average is up 18% in a month to $12,379.
A combination of seasonality and pre-tariff fixing helped supramax earnings to improve from an average of $7,746 per day in February to $9,541 in the first three weeks of March. The North China to Australia round voyage TCE went up by 15% to a tidy $14,250 per day. Voyages from South China to load coal in Indonesia and return saw a 21% TCE increase to $12,550 between February 21 and March 21. Ships fixed from the Indian Ocean to load coal in South Africa for China discharge enjoyed a 26% increase in daily TCEs between the same dates to $11,221. On the return voyage, leaving China to load coal in Indonesia for discharge on the east coast of India, rates added 31% to reach $14,694. In the west, the market was more muted. Trips out from the Black Sea to China lost 3%, hovering at $12,000 exactly on March 21. Trips out from the US Gulf via Panama rose 3% to $16,832. Rates on the Europe to US Gulf voyage rose 7% to a still mediocre $8,050 per day.
It is perhaps counter intuitive then that the daily TCE for a 38,000 dwt handysize bulk carrier voyage from Northwest Europe to the US Gulf went up by 23% over 30 days to March 21, to a supramax-beating $9,057 per day. Perhaps this was in part due to the increase in tonnage heading from Northwest Europe to South America, leading to a 14% increase in daily TCEs to $6,850 per day. Rates on the reverse voyage lost 6% to land at $14,033 per day while rates from the US Gulf to Europe added 2% to hang around at $10,893 per day. In the east, the Southeast Asia round voyage added 14% to hit $10,850 per day on March 21, while the Northeast Asia round voyage TCE went up 21% to a daring $11,563 per day. Even the North China to Southeast Asia voyage added 20% to reach $11,325 per day.
So far 2025 is shadowing 2023 – no bad thing, but will the market’s usual seasonal peak appear in April and May? Once again, unforecastable policy will have an outsized say in freight outcomes.
Energy News Beat