Weak freight rates across all segments, compounded by heightened uncertainty and seasonal factors, have further weighed on market sentiment and daily earnings.
The Handysize segment stood out this week as the most resilient in the dry bulk market, being the only sector to avoid double-digit losses. The segment concluded the fourth trading week at $7,406 daily, down 9.25 percent week-on-week. By contrast, the Panamax and Supramax segments reported steeper declines of approximately 14 percent, with Panamax rates hitting multi-year lows of $6,969 daily and Supramax rates at $8,078 daily. Meanwhile, the Capesize segment experienced the sharpest drop, plummeting 30 percent since last Friday to settle at $8,156 daily. These declines dragged the overall Baltic Dry Index further into three-digit territory, finishing the week at 778 points – the lowest levels observed since mid-February 2023. The continued weakness underscores a challenging environment for dry bulk carriers as oversupply and subdued demand weigh heavily on freight rates.
On the commodity front, oil prices edged up on Friday but remained on course for a weekly decline. This was primarily influenced by US President Donald Trump's announcement of plans to boost domestic production while urging OPEC, particularly Saudi Arabia, to reduce crude prices. The President’s remarks, delivered at the World Economic Forum, signaled a potential shift in the global oil supply dynamics, creating uncertainty in the market. Dalian iron ore futures closed the week with modest gains, supported by stable demand in China despite lingering concerns over US-China trade tensions. The resilience in China’s steel demand reflects continued industrial activity, although the broader outlook remains clouded by geopolitical uncertainties. Copper prices surged to a two-month high this week, buoyed by optimism surrounding a potential trade agreement between the US and China. Comments by President Trump expressing a preference for avoiding additional tariffs helped bolster sentiment. The weakening US dollar, which posted its largest weekly decline in over a year, further supported copper prices by making dollar-denominated commodities more attractive to global buyers. Chicago soybean, corn, and wheat futures declined on Friday following Argentina’s decision to reduce grain export taxes. However, weekly gains persisted due to concerns over dry weather conditions impacting South American production. Meanwhile, uncertainty surrounding potential US tariffs on key agricultural trading partners, including China and Canada, continues to influence global trade flows.
On the macroeconomic front, global growth is projected at 3.3 percent both in 2025 and 2026, below the historical (2000-19) average of 3.7 percent, according to the IMF. The forecast for 2025 is broadly unchanged from that in the October 2024 World Economic Outlook (WEO), primarily on account of an upward revision in the United States offsetting downward revisions in other major economies. Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies. Advanced economies show mixed trends. US growth, supported by robust demand and favorable financial conditions, is forecast at 2.7 percent in 2025. Meanwhile, the euro area faces slower recovery amid manufacturing weakness and geopolitical tensions, with growth revised down to 1.0 percent. Trade uncertainties and subdued investment weigh on overall prospects. In emerging market and developing economies, growth performance in 2025 and 2026 is expected to broadly match that in 2024. China’s 2025 forecast has been marginally revised upward to 4.6 percent. This revision reflects carryover from 2024 and the fiscal package announced in November largely offsetting the negative effect on investment from heightened trade policy uncertainty and property market drag. In 2026, growth is projected mostly to remain stable at 4.5 percent. India’s growth remains strong at 6.5 percent in 2025 and 2026, underpinned by steady domestic demand and reform-driven momentum.
World trade volume forecasts have been revised slightly downward by the IMF for 2025 and 2026. The revision owes to the sharp increase in trade policy uncertainty, which is likely to hurt investment disproportionately among trade-intensive firms. That said, in the IMF’s baseline, the impact of heightened uncertainty is expected to be transitory.
Against this backdrop, global economic growth remains steady but subdued, with resilience in the United States and emerging markets such as India and China offering some optimism. However, trade uncertainties and geopolitical risks continue to cast a shadow over the broader outlook. Commodity markets delivered mixed results, reflecting the influence of shifting geopolitical dynamics and trade flows. The dry bulk market, meanwhile, remains under significant pressure, with the Baltic Dry Index retreating to levels last seen in February 2023. Weak freight rates across all segments, compounded by heightened uncertainty and seasonal factors, have further weighed on market sentiment and daily earnings.
Data source: Doric