This week’s Chart Monitor highlights a continued upward trend in tonne-day growth for the Capesize segment during Q2 2025, particularly on voyages from the Atlantic Americas to the Far East. However, the recent surge in demand on the C3 route (Brazil to China) raises concerns about its durability as we move into the third quarter.
This week, C3 rates saw a downward trend as ballast vessel activity in the South Atlantic increased, potentially signaling a build-up of supply pressure in the weeks ahead. Meanwhile, Rio Tinto reported its lowest first-half profit in five years, at $4.81 billion, marking a ~16% year-on-year decline. The drop was driven by softer iron ore prices and persistent oversupply from key exporting regions, Australia, Brazil, and South Africa. The company also cut its interim dividend and reported higher unit costs, citing cyclone disruptions and reduced shipments from its Pilbara operations. Global iron ore production stays elevated. Major miners, including Fortescue, Rio Tinto, and BHP, have kept overall iron‑ore output steady or at record levels, while Vale has trimmed its high‑grade pellet guidance. That persistent volume amid soft Chinese steel demand is exacerbating oversupply pressures and capping the scope for a sustained iron‑ore price rebound.
Looking ahead, bullish sentiment for Q3 appears increasingly fragile, especially as macroeconomic signals from China continue to weaken. The Chinese manufacturing PMI has remained below the 50-point threshold for several months, registering 49.3 in June, indicating contraction in industrial activity and softening steel demand beyond just construction.
Seasonal factors also weigh on steel consumption in July–August, driven by high temperatures, heavy rainfall, and routine maintenance shutdowns, typically resulting in a 5–10% dip in demand. This year, however, the usual seasonal slowdown is compounded by structural economic weakness, exerting further downward pressure on iron ore prices.
China’s property sector, responsible for roughly 35–40% of domestic steel and iron ore demand, continues to deteriorate. In Q1 2025, new residential construction starts fell ~24% year-on-year, while property investment dropped ~16–17%. Despite government
stimulus efforts, including a ¥4 trillion loan facility and tax incentives, buyer interest remains subdued. A backlog of unsold homes and ongoing developer bankruptcies continue to drag on construction activity and raw material consumption.
Finally, China’s portside iron ore inventories climbed to 133–136 million tonnes before the end of June, around 12% above the five-year average, underlining subdued offtake and deepening demand-side risks, rather than any sign of market stabilization.
Remark: Freight market price trends depicted are based on Signal Ocean Assessments.
On the C3 and C5 routes, signs of a downward correction are evident, with rates at $23/ton for Brazil–China and $10/ton for Australia–China. Oversupply issues continue in the South Atlantic, as shown by the rising number of ballasters, which has reached a high of 270, while daily loaded volumes stay low at around 1.1M mt.
Panamax spot rates for routes from East Coast South America (ECSA) and the US Gulf (USG) to the Far East have continued to decline this week, experiencing drops of 7% and 5%, respectively, following a peak in mid-July. Despite this, daily loaded volumes from ECSA remain firm. While the number of ballasters to ECSA is trending downwards, it remains above the 200 mark; the last significant decrease to approximately 180 ballasters occurred in early April.
Supramax spot rates from the U.S. Gulf to the Far East continued their downward trajectory, settling at $40/tonne, mirroring the trend observed the previous week. The ECSA–Far East route also softened further, with rates declining to $36/tonne. Concurrently, daily loading volumes from the USG/USEC fell below 0.3 million tonnes, extending the decline. However, the recent drop in Supramax supply to USG/USEC following the early June spike is providing some support in an otherwise markedly weakening market.
SECTION 2/ SUPPLY
Capesize Ballasters Overview (Vessel Count) Mixed
Capesize ballasters view: Capesize ballast availability in the Atlantic increased significantly, with a 40% rise in the North Atlantic and an 18% increase in the South. Conversely, ballast activity in the Indian Ocean and South Africa continued its declining trend from the previous week, with a 12% week-on-week decrease.
Panamax ballasters view: Ballast activity in Australasia saw a 28% week-on-week increase, indicating an oversupplied Pacific region. In contrast, the South Atlantic experienced a 10% decrease, while the North Atlantic recorded an 8% rise.
Supramax Ballasters Overview (Vessel Count): Increasing
Supramax ballasters view: Oversupply worsened in both the Atlantic and Pacific basins. In the Atlantic, ballast supply surged, rising 25% in the South and 16% in the North. Similarly, the Pacific market experienced increases, with the Indian Ocean/South Africa and Far East/NOPAC regions each seeing a 12% rise, and Australasia increasing by 15% week-over-week
Handysize Ballasters Overview (# Vessel Count): Increasing
Handysize ballasters: Vessel oversupply is notably increasing across both the Pacific and North Atlantic regions. Specifically, ballasters have risen by 15% in the North Atlantic, 11% in the Far East/NOPAC, and 20% in Australasia.
SECTION 3/ DEMAND (Capesize)
The tonne-days seasonal analysis for steel cargo has shown a significant increase throughout the year, surpassing last year’s second-quarter levels and recently reaching a three-year high. This upward trend is likely to persist, with the Supramax segment continuing to consolidate its role in carrying steel cargoes in the months ahead.
Latest estimates reveal a 70% increase compared to the levels observed at the end of July 2023.
SECTION 4/ CONGESTION
This week, we highlight the port congestion status for North China, with Tianjin ranking as the most congested port in terms of both waiting and operating Supramax vessels.
When comparing recent congestion levels as a percentage of the fleet, we observe that from mid-March to mid-May, congestion hovered around or slightly above 4.5%, exceeding the corresponding period last year.
As of the latest estimate on 28th July, congestion stands at 5.5%, now higher than the same period in 2023 and 2024, and approaching 2022 levels. Although this trend is upward, the Baltic Supramax Index, while higher than at the start of the year, has not yet shown a spike that would suggest direct market impact from congestion alone.
Source: Signal Ocean
