A year ago, Doric’s Weekly Insight highlighted a relatively stable dry bulk market, with the Panamax segment standing out after posting a weekly gain of $1,317 and closing at $15,263 per day. The geared segments displayed a predominantly sideways trend but ended positively, with Supramax rates at $11,711 and Handysize at $10,735 per day. Meanwhile, the Capesize segment lost momentum as the week progressed, concluding at $17,708 per day. Grain trades contributed to a positive sentiment in the Atlantic for mid-sized bulkers, whereas mineral trades faced downward pressure, impacting corresponding Baltic indices.
Twelve months later, market conditions have shifted drastically, particularly for mid-sized bulkers. The Capesize segment settled at $6,977 per day on Thursday, a level last seen in late February 2023, as muted trading activity in the Atlantic weighed on the spot market. The Panamax segment faced broad pressure, with the ECSA market struggling to absorb a flotilla of ballasters. Against this backdrop, the segment, a key player in staple grain trades, touched a multi-month low of $6,736 on Tuesday, significantly lower year-on-year. However, towards the latter part of the week, signs of a potential market bottom emerged, with fixtures marginally improving. In contrast, the geared segments exhibited no such reaction, with Supramax and Handysize rates closing at their weekly multi-month lows of $7,628 and $6,780 per day, respectively. The continued weakness underscores a challenging environment for dry bulk carriers, as trade uncertainties and geopolitical risks cloud the broader market outlook.
In the Pacific region, the Year of the Wood Dragon came to an end, giving way to the Year of the Wood Snake. The coming year is therefore symbolised by the “wisdom” and “intuition” of the snake, coupled with the “growth” and “inventiveness” of the wood. These are all traits would be much in demand in the coming year as we navigate the global macro and geopolitical landscape that is set to be reshaped by the new US administration. This transition coincides with a pivotal period for China as it adjusts to a ‘new normal’ characterized by slowing growth.
China’s economy ended 2024 on a stronger-than-expected footing, expanding by 5.0 percent, supported by a wave of stimulus measures. Electricity generation reached a record 9.42 trillion kilowatt-hours (kWh), reflecting a 4.6 percent year-on-year increase and highlighting the economy’s reliance on energy-intensive industries. Power demand growth significantly outpaced GDP expansion, underscoring the economy’s heavy reliance on energyintensive industries. Foreign trade set a new record at 43.85 trillion yuan ($5.98 trillion), with imports and exports growing by 5.0 percent year-on-year. Exports rose by 7.1 percent to 25.45 trillion yuan, while imports increased by 2.3 percent to 18.39 trillion yuan, according to data from the General Administration of Customs.
However, structural challenges remain. Property investment declined by 10.6 percent in 2024, marking the steepest contraction since record-keeping began in 1987. While new home prices stabilized in December after 18 months of consecutive declines, new construction starts plunged by 23.0 percent over the year. Shanghai experienced only its second retail sales decline in four decades, while Beijing saw a 2.7 percent drop. Nationally, retail sales fared better, growing by 3.5 percent in 2024, according to the National Bureau of Statistics.
Despite economic headwinds, holiday travel in China is expected to reach a record 9 billion trips, surpassing last year’s 8.4 billion. Car travel is projected to dominate with 7.2 billion journeys, while train and air travel are forecast at 510 million and 90 million passengers, respectively. The recent recognition of the Spring Festival as an Intangible Cultural Heritage by UNESCO has further fueled enthusiasm for travel and consumption. The holiday season typically provides a boost to retail, entertainment, and hospitality sectors. Notably, cinema pre-sales for the Lunar New Year surpassed 400 million yuan ($55.24 million) by January 23, marking the fastest-ever pre-sales for the period. While the film industry has struggled—box office revenues in 2024 were down 22.6 percent year-on-year—the government has actively promoted consumption through an extended eight-day holiday, winter tourism campaigns, and efforts to ensure affordable domestic airfares.
More broadly, Beijing continues to support economic activity through stimulus measures, including interest rate cuts, pension increases, and trade-in programs for consumer goods. While the official economic targets for 2025 will be announced in March, policymakers are expected to maintain a growth target of around 5.0 percent. The People’s Bank of China is likely to implement further monetary easing in the first quarter, potentially lowering interest rates and reserve requirements, though concerns over yuan depreciation and capital outflows could limit aggressive stimulus.
The dry bulk market finds itself at a turning point as it enters the Year of the Wood Snake, with China’s economic trajectory remaining a crucial factor in shaping demand. The country’s stronger-thanexpected GDP growth in 2024, alongside record electricity generation and foreign trade volumes, underscores the resilience of its industrial base. However, deep-rooted structural challenges in the property sector and consumption patterns cast a shadow over long-term demand. As China emerges from the Lunar New Year holiday, attention will turn to how quickly industrial activity resumes and whether renewed momentum in construction and manufacturing can support a broader recovery in freight demand. While weak freight rates across all segments, compounded by heightened uncertainty and seasonal factors, have weighed on market sentiment and daily earnings, forward market signals indicate optimism for a seasonal uplift, offering a glimmer of hope for an otherwise cautious market.
Data source: Doric