The dry bulk market has rebounded strongly to its highest level in the past five years. In its latest weekly report, shipbroker Xclusiv noted that the Capesize bulk carrier market has reached a high not seen in nearly five years, with the Baltic Exchange’s C5TC index (the Capesize time charter average rate) reaching $54,791/day on September 4, 2026.

According to historical Baltic Exchange data, the last time rates were above the current level was on October 21, 2021, when the rate stood at $57,374/day, during the upswing of the 2021 super rally, whose peak approached $87,000/day. The current advance is therefore not a short-term seasonal rebound; the market has now entered one of the strongest freight cycles of the post-pandemic era.

Atlantic Market Becomes the Core Engine, with Strong Ton-Mile Demand

Xclusiv pointed out that the core driver of this rally comes from the Atlantic market. Brazilian iron ore exports are accelerating, and Guinean bauxite continues to generate substantial long-haul shipping demand for China. Data show that recent weekly Brazilian iron ore shipments rose about 20% week on week, while Guinean bauxite exports, on a four-week rolling average basis, were up about 55% year on year, further boosting cargo demand in the Atlantic region.

This is particularly important for Capesize bulkers because Atlantic routes tie up vessels for longer, thereby increasing ton-mile demand. In the second quarter of this year, total Capesize ton-miles rose 4.9% year on year, mainly driven by 2% growth in iron ore ton-miles, 7.7% in bauxite and 15.3% in coal. Meanwhile, the number of Capesizes ballasting south to the Atlantic to await employment has fallen to about half of last year’s level, leaving charterers competing fiercely for a very thin spot tonnage list.

Weather Factors Further Exacerbate Supply Pressure

Xclusiv added: “Weather factors have further exacerbated supply pressure. Recent operational disruptions in the Pacific have coincided with simultaneously stronger cargo demand in both ocean basins and constrained vessel supply, together creating what charterers call a ‘perfect storm’ of firmer demand and tighter supply.”

Renewed Houthi threats and broad instability in the Middle East are not the direct cause of this Capesize rate rally; the core Brazil/West Africa-to-China trade routes do not pass through the Red Sea. Nevertheless, persistent security risks are reducing the operating efficiency of the global fleet and raising voyage risks, while the entire shipping market remains increasingly sensitive to disruptions in key shipping lanes.

The forward market also confirms the resilience of this rally. September and October forward freight agreements (FFAs) have recently traded at about $50,000/day, while Q1 2027 contracts are priced close to $32,000/day—unusually firm for a traditionally slack season, indicating that market pricing already anticipates that the rally is not merely a brief bout of spot market tightness.

2024 to 2026: A More Sustainable Boom Cycle

For the secondhand ship sale and purchase (S&P) market, a more crucial point is that the current market strength is not limited to 2026. According to Baltic Exchange daily data through September 4, the average daily C5TC rate during 2024–2026 was about $24,488/day, compared with $22,005/day in the comparable period of 2021–2023, an increase of about 11%.

This figure is particularly striking because the comparison period itself includes the 2021 major bull market, when the route’s annual average rate reached as high as $33,333/day. By contrast, rates in the current new cycle have shown greater stability. The annual figures are: $22,593/day in 2024, $21,297/day in 2025, and $31,937/day in 2026 year to date.

Xclusiv concluded: “From a shipowner’s perspective, the available data show that 2024–2026 is an operationally stronger cycle. Daily operating costs (OPEX) for Capesize bulkers generally do not exceed EUR 8,000–9,000/day; before financing and capital costs are deducted, average freight rates alone provide considerable operating profit margin, while current spot earnings are several times operating costs.”

If the current freight strength persists, the impact on the S&P market will be direct. Stable and abundant cash flow and more optimistic shipowner sentiment will further support already high secondhand Capesize bulk carrier prices.