Due to the strengthening of Capesize shipping rates, the Baltic Dry Index (BDI) has rebounded since early November, but the index is still down 10% year-on-year. Filipe Gouveia stated, "Compared to October 2024 and November 2023, the shipping volume in the Capesize market has increased by 1% so far in November. However, this increase is still insufficient to return to the highs of the first three quarters of 2024." - BIMCO shipping analyst.

On November 19, 2024, the BDI reached 1627 points, up from 1374 points on November 4. Previously, the index had gradually declined since the end of September due to weak Capesize shipping volumes. Capesize vessels account for 40% of the BDI, so changes in this market have a significant impact on the index.

Currently, although the Baltic Capesize Index (BCI) has increased by 4% year-on-year, the BDI is still down 10% year-on-year, while other sectors continue to perform poorly. The BDI and BCI indices performed strongly in the first three quarters of 2024, rising 41% and 94% year-on-year, respectively.

The weakness in spot rates for Capesize vessels has negatively affected market sentiment. Since early October, one-year time charter rates have decreased by 7%, while the price of five-year-old second-hand Capesize vessels has dropped by 2%," Gouveia said.

So far in November, the demand for Capesize vessels has increased by 4% year-on-year, significantly lower than the 7% year-on-year growth rate in the first three quarters of 2024. The demand growth has outpaced shipping volume due to longer average sailing distances. The transport volumes of Brazilian iron ore and Guinean bauxite have both increased, leading to longer shipping distances compared to Australian cargo.

However, despite the Capesize market not being as strong as in the first three quarters of 2024, it is still stronger than in November 2023. The supply-demand balance has tightened slightly, with supply increasing only 3% year-on-year. This segment benefits from low delivery volumes, and even though congestion has eased, supply remains low.

The Baltic Exchange Capesize 5TC forward freight agreement (FFA) indicates that the market expects freight rates to remain around current levels in December. The FFA points out that in the first quarter of 2025, rates are expected to decline due to seasonal reasons, significantly lower than the levels in the first quarter of 2024.

Looking ahead, as the market may remain strong, Capesize freight rates could still reach this year's highs in 2025. We currently expect the supply-demand balance in the Capesize market to remain balanced, with both demand and supply growing by 0.5-1.5%," Gouveia said.