Middle East Clashes, Dry Rates Climb Wall of Worry

BRS Research as cited on Singapore’s LianHe Zaobao, 15 June
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June is proving fortuitous for dry bulk shipping, with the Baltic Dry Index surging 38% month-to-date—adding roughly 600 points to reach ~2,000 as of 16 June, up from ~1,400 points on 2 June. The rally is buoyed by improving sentiment as the US and China return to the negotiating table, bringing a potential trade truce back into focus with the 90-day tariff pause set to expire on 8 July. Spot daily earnings have strengthened across all segments, with the C5TC continuing its surge to $31,000/day on 16 June, up from $19,000 on 2 June. Meanwhile, the recent escalation between Israel and Iran—triggered by Israeli strikes on Iranian military and nuclear infrastructure—has sharpened the geopolitical risk across the Middle East’s critical maritime corridors. For now, shipping flows remain uninterrupted, with Iran signalling willingness to engage in truce talks while US President Trump weighs Iran options, tensions and volatility persists.

Capesize: Volatility with Underlying Tightness Recent disruptions across Peru, Saldanha Bay, and Newcastle are subsiding, though Guinea continues to face logistical headwinds ahead of rainy season. Brazil and West Africa-to-Far East routes led the gains as tight early-July tonnage prompted majors to pay premiums. Baltic’s 16 June assessments has Tubarão–Qingdao (C3) trading at $26.60/mt, while West Australia–Qingdao (C5) trades at $10.99/mt. Period interest remains limited, with 1-year non-scrubber fixtures assessed around $18,000–$19,000/day as owners hold out in hopes for better days.

Panamax: Stable Pacific, Firmer Atlantic The Pacific Panamax market remained broadly balanced. Indonesian coal fixing remained soft, while Vietnam demand offered some support. The Atlantic basin saw firmer momentum, P1A approachs $13,000/day, while long fronthaul fixtures reached the high $19,000s/day for minerals and mid-$20,000s/day for grains. The South Atlantic also strengthened, with P6 rising to ~$13,000/day on solid end-June and early Q3 demand.

Supramax: Cautious Sentiment with Pockets of Resilience The Pacific Supramax market stayed lacklustre, weighed by weak steel exports and softer Indonesian coal volumes. Spot rates ranged from $5,000–$9,000/day depending on position and specification, while Ultramax units occasionally achieved $15,000–$16,000/day for India-bound coal. The Atlantic market improved moderately after a slow start post-holidays. The Continent and Mediterranean remained subdued, while Ultramax front-haul ex-ECSA fixed just below $13,000 + $300,000 APS.

FFAs & Assets Despite Cape's spot earning strength, forward sentiment remains cautious. Q3 FFAs have slipped into discount, steep backwardated structure reflects concerns around medium term macroeconomic headwinds and tariff uncertainty. Subcape segments remain under pressure as fleet growth continues to outpace trade volumes. Tightening environmental regulations and limited newbuild deliveries are expected to gradually rebalance supply, creating compelling long-term entry points for opportunistic Capesize buyers, particularly with structural drivers like Simandou’s iron ore ramp-up on the horizon.

For tailored insights and freight strategy support, contact your BRS broker or email: research@brsbrokers.com.