Capesize Earnings Break $45,000 As Year-End Tightness Bites

December 4, 2025

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Capesize earnings have surged to their strongest levels in roughly two years, with the Baltic C5TC benchmark jumping around 16% in a single day to just under $45,000 per day and more than triple where it stood a year ago. The rally reflects tight tonnage across both Atlantic and Pacific basins, stronger long haul iron ore and coal flows, and growing congestion that is soaking up available ships. That combination is delivering a sharp cash flow uplift for owners exposed to the spot market, while charterers and cargo interests face rapidly rising freight bills and tougher negotiations on period cover.

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Capesize spike in 30 seconds

The Baltic capesize benchmark has jumped to around $45,000 per day, its highest level in about two years, after a sharp daily gain. Tight tonnage lists in both Atlantic and Pacific basins, strong long haul iron ore and coal flows and congestion are combining to push effective supply down and earnings up.

Cash and fleet impact: At these levels most capesize owners earn a wide margin over operating and finance cost, which accelerates deleveraging, supports higher second hand values and can fund fleet renewal decisions.
Cargo and charterer impact: Steel mills, miners and traders face a visible jump in freight as a share of landed cost, with less room to play Atlantic against Pacific lists because both regions are tight.
Risk and timing: Volatile daily moves and an only moderate orderbook make this a high earnings but high uncertainty phase, where the value of forward cover and flexible sourcing increases for both owners and charterers.

Bottom line: capesize at $45,000 per day is a classic high phase of the dry bulk cycle that strongly favours spot exposed owners while forcing cargo interests to decide quickly how much 2026 volume to cover and at what level.

Item	Summary	Business mechanics	Bottom line effect
Capesize rates near $45,000 per day: fast tightening across basins
Rate spike and benchmark move	The Baltic C5TC capesize benchmark has surged to roughly $44,000 to $45,000 per day, up about 16 percent in one session and more than 200 percent compared with the same point last year, marking the strongest earnings in around two years.	A mix of stronger Atlantic and Pacific demand, longer haul cargoes and weather related delays has reduced effective supply, so each available hull commands a higher time charter equivalent and can trade more selectively.	📈 Spot exposed owners see a sharp jump in daily cash generation and can repair balance sheets faster. 📉 Charterers face immediate pressure on voyage costs and may accelerate period coverage to regain visibility.
Iron ore and coal pull	Higher Brazilian and Australian iron ore exports, together with firm coal flows into Asia, are sustaining long haul employment for capes at a time when fleet growth is limited and some ballasters are tied up.	Long distance Brazil to China or West Australia to China runs consume more ship days per cargo than short regional trades, while additional coal stems into East Asia further tighten Pacific lists and support higher bids on both basins.	📈 Longer average haul boosts tonne miles and supports elevated TCE levels for owners. 📉 Steel mills and power utilities face higher delivered raw material costs and may review inventory and contracting strategy.
Atlantic and Pacific basin balance	The Atlantic is drawing ships away from the Pacific with attractive fronthaul returns, while the Pacific still has enough activity to keep local lists tight, producing a broadly firm picture rather than a one sided basin spike.	Owners can compare Atlantic round voyages, Brazil to China, and Pacific round trips and often fix where the effective daily return and repositioning value is strongest, which compresses arbitrage for charterers trying to play one basin against the other.	📈 Owners gain negotiating leverage across loading areas instead of just in one hot spot. 📉 Charterers lose flexibility to shop between Atlantic and Pacific lists and may have to pay up or accept tighter terms on laycans.
Spillover into panamax and smaller sizes	Panamax and supramax benchmarks have also climbed compared with last year, although not as dramatically as capes, as some cargoes split into smaller lots or shift to alternative vessel sizes when cape freight widens too far.	When the cape market tightens, some fixtures that could use either a capesize or a large panamax pivot to the smaller segment, lifting utilisation there and putting gentle upward pressure on rates further down the size spectrum.	📈 Diversified owners with mixed fleets capture improved earnings across more than one segment. 📉 Cargo interests may find that switching size class offers only partial relief once spillover takes hold.
Capesize values and second hand market	Sale and purchase data show capesize values up strongly this year, with five year units gaining more than 20 percent and older ships in the 10 to 15 year band changing hands at rising prices as buyers bet on sustained strength.	Higher spot earnings shorten payback periods on existing tonnage and support more aggressive bidding for modern and mid age ships, especially where buyers see upside in the forward freight agreements curve or expect continued tightness into next year.	📈 Current owners see paper gains on fleet values and greater refinancing options. 📉 Late entrants risk buying at elevated prices if the cycle turns faster than expected.
FFA curve and volatility	The rapid jump in spot earnings is reflected in more active forward freight agreement trading as owners and charterers hedge exposure to year end volatility and early next year positioning.	Owners with cash exposure look to lock in profitable levels on the curve, while charterers and traders seek cover for core volumes, which can steepen or flatten different parts of the FFA strip depending on sentiment about how long tightness will last.	📈 Well timed hedging allows owners to secure parts of the current uplift even if spot softens later. 📉 Unhedged charterers remain vulnerable to further spikes if congestion or weather tighten lists again.
Fleet growth and newbuilding backdrop	The capesize orderbook as a share of the fleet remains moderate compared with some earlier cycles, which limits near term supply growth, although new VLOC and cape orders in China will gradually add capacity later in the decade.	Limited prompt deliveries mean that short term supply is driven more by speed, routing and congestion than by yard output, while new orders placed today respond to the current earnings picture but will only arrive after a multi year lag.	📈 Smaller orderbooks support the idea that tightness can persist if demand holds. 📉 A wave of fresh orders on the back of high rates could set up a softer phase later if demand normalises.
Charterer response and contract strategy	Cargo interests facing higher voyage quotes are revisiting contract of affreightment coverage, optionality between basins and whether to advance or stagger tenders for 2026 volumes to avoid being fully exposed to a hot spot market.	Some charterers will accept higher spot exposure if they believe the spike is temporary, while others will prefer to secure medium term cover at currently elevated but predictable levels to stabilise delivered cost on strategic supply chains.	📈 Those with flexible sourcing and shipping options can soften the impact by shifting load ports or size classes. 📉 Less flexible buyers tied to fixed routes or terminal constraints absorb more of the current freight uplift directly.
Notes: Rate levels and percentage moves summarised here draw on Baltic Exchange benchmark data and dry bulk market reporting as of early December 2025. Actual earnings vary by voyage, ballasting pattern, waiting time and commercial terms, and conditions can change quickly around weather events, congestion and cargo programmes.

Capes at $45,000 per day: who is winning this phase of the cycle

The capesize market has swung into a high earnings phase with spot levels near $45,000 per day. Tight lists, long haul iron ore and coal flows and congestion are combining into one of the strongest rate environments since the last peak.

High earnings phase
Tight lists in both basins

Cash generation

Spot TCE vs operating cost

At current benchmark levels, daily earnings sit far above typical operating cost and interest, so each additional voyage clears a larger free cash margin for spot exposed owners.

The longer this lasts, the more room there is to restore balance sheets and build reserves.

Market tightness

Available tonnage per cargo

In both Atlantic and Pacific lists, genuine open ships against prompt cargoes have become thin, especially where weather and port delays remove effective supply from the spot market.

Small changes in congestion or ballasting can move rates sharply when lists are this tight.

Volatility

Daily percentage moves

Double digit daily moves in the C5TC benchmark show that the market is in a more volatile regime, where sentiment and fresh fixtures quickly reset the reference level.

This increases the value of well timed FFAs and option structures for both sides.

What different rate bands usually mean for behaviour

Sub $15,000 per day Defensive mode Owners concentrate on cover and cost control, older tonnage becomes a scrap candidate and charterers can lock in attractive period rates if they have visibility on volumes.

$15,000 to $30,000 per day Balanced trading Most ships cover operating and finance costs with a margin. Owners mix spot and short period coverage, charterers use a blend of contracts and opportunistic spot fixtures.

$30,000 per day and above High earnings, cycle questions Owners with ships on index or spot can generate strong cash per day, S and P values respond and charterers revisit whether to advance tenders or accept more rate risk.

Where owners and investors see upside

High rates improve today’s earnings and change how near term risk is viewed.

Strong TCEs speed up deleveraging, give more flexibility on surveys and drydock timing and can fund selective fleet renewal decisions without relying entirely on fresh debt.
Higher asset values and stronger cash flows can support refinancing on better terms or free up capital for acquisitions of modern tonnage.
Owners with a mix of spot exposure and hedging can lock in parts of this uplift on the FFA curve while still participating in further spikes if congestion increases.

Where charterers and cargo interests feel pressure

Freight becomes a larger and more volatile part of delivered cost.

Steel mills, miners and traders moving long haul cargoes face a visible step up in freight as a share of landed cost, which can squeeze margins or shift trade flows.
Buyers with limited optionality on ports or route patterns have less room to wait for softer windows and may be forced to accept tighter laycans and higher rates.
The spread between long term contract levels and spot can widen, creating internal debate on how much volume to leave exposed in 2026 fixture plans.

This phase of the cycle: who it suits and who it tests

Owners with modern spot exposed fleets Benefit directly from high rates and may be able to select cargoes, favouring routes that optimise daily returns and future positioning.	Owners heavily fixed on low period Enjoy stability but watch the rally from the sidelines if they locked in long cover at much lower levels earlier in the year.
Charterers with broad optionality Can respond by shifting load ports, using alternative size classes or adjusting shipment timing to soften the impact of current capesize prices.	Charterers tied to fixed routes Have less flexibility and are more exposed to the full freight uplift on specific corridors such as Brazil to China or Atlantic to Far East.

The current capesize spike is a textbook high earnings phase. Owners with open tonnage are capturing strong daily margins and seeing asset values move in their favour, while charterers and cargo interests face a more expensive and volatile freight line into year end. How long congestion and long haul demand can keep lists this tight will determine whether this is a short burst or the start of a longer period where $30,000 plus capesize earnings feel normal again rather than exceptional.

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